Power cuts and bird flu to blame, wiping out R2.1bn from Astral Foods profits

It's the first time in Astral Foods 23-year history that it reported a financial loss.

Bruce Whitfield speaks o Chris Schutte, CEO at Astral Foods.

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Bird flu and loadshedding related costs have decimated Astral Foods earnings for 2023, wiping out R2.1bn of the Group's profits.

The Group has for the first time in its 23-year history reported a financial loss, with a devastating set of results reflecting the many challenges faced during the year.

The company's operating profit decreased by 143% to a loss of R621 million, largely due to loadshedding, water disruptions and bird flu costs amounting to R2.1bn.

Revenue in the Poultry Division, which contributed 82% towards total external revenue was down, driven by a decline in sales volumes of 9.6%.

This was largely brought on by the worst outbreak of a highly pathogenic avian influenza, which has decimated the bird population, resulting in millions of chickens and other poultry having to be culled.

Bird flu, the worst ever. We lost 40% of our breeding stock.

Chris Schutte, CEO - Astral Foods

Revenue for the Feed Division increased by 11.9% to R11.6 billion (2022: R10.4 billion) as a direct result of higher feed selling prices on the back of an increase in raw material costs.

Feed sales volumes increased marginally by 1.1%, as the internal requirement for broiler feed increased by 9.2% due to high feed consumption in the older and heavier broilers as a result of the load shedding broiler slaughter backlog.

We had our most expansive raw material in history over the past year, going into the feed. And feed makes up 70% of the total cost of production.

Chris Schutte, CEO - Astral Foods

Revenue for the Poultry Division decreased by 0.8% to R15.8 billion.

Loadshedding added to the industry's woes, impacting on the processing of birds in the slaughter programme.

Revenue was negatively impacted by heavier birds as a result of downtime in the processing plants on the back of loadshedding.

The downtime resulted in a backlog in the slaughter programme, with broilers remaining on farm longer, resulting in older bird ages and heavier live weights.

All of this adds to the cost of producing chicken, and if you can't recover that in your selling price, you sit with these kinds of figures.

Chris Schutte, CEO - Astral Foods

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This article first appeared on CapeTalk : Power cuts and bird flu to blame, wiping out R2.1bn from Astral Foods profits

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