Quantum Foods final results September 2016
Revenue for the year increased to R3.9 billion (2015: R3.5 billion). Gross profit was higher at R688.9 million (2015: R604.2 million) while operating profit lowered to R124.3 million (2015: R164.1 million). Profit for the year attributable to owners of the parent decreased to R91.4 million (2015: R126.9 million). Furthermore, headline earnings per share dropped to 28 cents per share (2015: 54 cents per share).
A gross dividend of 6 cents per share has been approved and declared by the board for the year ended 30 September 2016 from income reserves.
Protein consumption is largely driven by an increase in per capita income, as well as by higher levels of urbanisation. Although the latter continues in South Africa, per capita income declined in recent years. This is reflected in weakened consumer demand, and will continue to put pressure on the Group's profitability, particularly if there is no decrease in the cost of raw materials. To mitigate this risk, Quantum Foods will continue to focus on efficiencies in farms and factories. Optimal procurement of raw materials will remain a priority.
The focus created by combining broiler and layer farming at executive level has proven successful, and has enabled the egg business to concentrate on processing and commercial performance.
The feed business remains the backbone of Quantum Foods. Quantum Foods will continue to invest in organic and acquisitive growth opportunities as they arise. Africa faces a negative, medium-term outlook due to the slowdown in global commodity prices as well as the drought in Southern Africa. Despite this, Quantum Foods believes that this current situation will turn around and that the Group is well positioned to gain benefits from the recent investments in Zambia, Uganda and Mozambique. The Group will continue to consider opportunities on the African continent, focusing on the feed and egg value chains.
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