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Astral Foods H1 profits to drop as high feed costs and imports bite
Astral Foods expects its first-half profit to come under tremendous pressure as high input costs and a steady stream of poultry imports take their toll.
skeeze via pixabay
The poultry producer said on Monday in a trading update that headline earnings per share (HEPS) were expected to be at least R1.94 in the six months to March, from R7.74 a year ago.
Like its peers, Astral has been fending off higher feed costs as a result of a drought, which pushed up grain prices such as maize and soya.
New regulations that limited the brining of chicken, coupled with soft consumer spending, affected the company's financial performance.
Last week, RCL Foods said its first-half HEPS were expected to fall by up to 53%, due to its chicken business, which buckled under the weight of feed costs and imports.
The effects of the drought, however, are expected to ease in 2017, thanks to good rains that have allowed farmers to replenish their depleted stocks.
The expectation of an improved outlook in summer crops has boosted Astral, in particular, with its share price rallying from around R120 in November to R152.72 currently.
Source: BDpro
Source: I-Net Bridge
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