Poultry and egg producer Quantum Food Holdings expects to report higher first-half earnings as trading conditions remained favourable and demand increased.
The group said in a trading update on Wednesday that HEPS for the six months ended March will be 12%-20% higher at between 83.5c and 89.5c, compared with a year ago.
EPS is expected at between 87.4c and 93.4c, or 17%-25% higher year on year. EPS includes an after-tax profit of R8.1m or 4c per share, arising from the disposal of the dormant Najjera breeder farm in Kampala, Uganda, which was previously classified as a non-current asset held for sale.
The group said trading conditions in the first half were generally favourable, supported by higher demand for poultry products, lower feed input costs, low levels of electricity disruption and continued recovery following the impacts of avian flu in prior years.
Quantum said earnings from the feeds business improved, despite lower volumes sold to external customers.
Earnings from its African businesses were significantly higher, particularly in Zambia, which benefited from lower feed costs, fewer load-shedding hours and increased demand for day-old chicks
Earnings from the broiler farming business also improved, driven by further gains in farming efficiencies in the Western Cape and the benefits realised in the day-old chick business in the North West following the conversion of two farms to broiler breeder farms producing hatching eggs in the vicinity of the Hartbeespoort hatchery.
This reduced hatching egg costs compared with the previous reporting period, during which the majority of the hatching eggs were supplied to the Hartbeespoort hatchery from breeder farms in the Western Cape.
Earnings from the layer farming business were stable, “reflecting lower earnings from the external sale of layer livestock and additional costs associated with the geographic relocation of layer breeder stock, offset by continued improvements in layer farming efficiencies,” it said.
Earnings from the egg business were lower as the benefits of a 4% increase in egg volumes sold, lower feed costs and improved packing station efficiencies were more than offset by a decline of 9% in average egg selling prices.
Earnings from its African businesses were significantly higher, particularly in Zambia, which benefited from lower feed costs, fewer load-shedding hours and increased demand for day-old chicks.
In Uganda, profitability also improved, driven by stable feed costs, enhanced farming efficiencies and increased volumes of day-old chicks and feed sold. However, Mozambique reported lower earnings as egg prices declined, it said.
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