South Africa’s biggest chicken producer back in black

Astral Foods has bounced back in the past financial year, posting a profit of R737 million for the year compared to a loss of R539 million in the prior period. 

The company attributed this recovery to the sharp reduction in load-shedding during the past financial year and the end of bird flu-related costs. 

Astral was hit particularly hard by the intense load-shedding of 2023, with the company unable to process chickens for extended periods of time throughout the year. 

This does not only prevent the company from selling its goods, but also meant it had to spend additional money on feeding its birds for longer as they could not be processed. 

While load-shedding prevented Astral from processing its chickens, bird flu wiped out large parts of its stock and forced it to spend money on limiting the disease’s impact and slowing its spread. 

The impact of these factors on the company’s operations in the 2024 financial year was greatly reduced, resulting in Astral bouncing back into a profit of R737 million. 

Revenue increased by 6.4% to R20.5 billion, with its Poultry Division contributing over 80% of all revenue. Headline earnings per share skyrocketed by 245.1% to 1,920 cents per share.

However, Astral could not avoid all the negative after-effects of load-shedding, with power cuts still impacting its operations in 2024. 

The intense load-shedding experienced towards the end of 2023 and in early 2024 resulted in Astral having to change its product basket as it could not process chickens as it normally would. 

This has slowly normalised, but the impact of bird flu and load-shedding resulted in a lower quantity of birds that could be processed. These chickens also had significantly heavier live weight. 

As a result, sales volume growth was subdued at 4.6% but was much heavier at a total of 21,449 tonnes for the year. 

Thanks to the absence of load-shedding and bird flu for the majority of 2024, Astral’s Poultry Division reported a 142% increase in operating profit to R580 million. 

Astral is not resting on its laurels, with the company implementing a turnaround plan termed Project 3R – “Re-set, Re-focus, and Re-start”. 

This plan has proven successful so far, with the company’s internal metrics improving. It has kept a tight lid on costs and is steadily rebuilding its balance sheet. 

As a result, Astral posted a dividend of 520 cents per share for the financial year ended 30 September 2024. 

The company said bird flu remains a major risk to the local poultry industry and bemoaned slow progress towards the approval of vaccination for breeding stock. 

Water disruptions also pose an increasing risk to Astral’s business as water shortages are becoming increasingly common.