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ARL - Astral Foods - Unaudited Interim Results And Dividend Declaration
For The Six Months Ended 31 March 2007
Astral Foods
Incorporated in the Republic of South Africa
Registration no 1978/003194/06
Share code: ARL
ISIN: ZAE000029757
Unaudited interim results and dividend declaration for the six months ended
31 March 2007
* Operating profit increase 10%
* Headline earnings per share increase 12%
* Interim dividend increase 16%
Condensed Income Statement
Unaudited Unaudited Audited
six six 12 months
months months
ended ended ended
31 March 31 March 30 Sept
2007 2006 Change 2006
R`000 R`000 % R`000
Revenue 2 928 191 2 557 707 14 5 183 664
Operating profit (note 456 160 414 445 10 765 953
4)
Net finance income 2 979 2 381 4 884
Profit before income tax 459 139 416 826 10 770 837
Income tax expense for (153 (135 524) (254 339)
the period 183)
Profit for the period 305 956 281 302 9 516 498
Attributable to:
Equity holders of the 302 004 278 046 9 509 517
parent company
Minority interests 3 952 3 256 21 6 981
Profit for the period 305 956 281 302 9 516 498
Earnings per share
(cents)
- basic 777 693 12 1 285
- diluted 774 674 15 1 268
Additional Information
Headline earnings 301 697 277 551 9 509 803
(R`000) (note 5)
Headline earnings per
share (cents)
- basic 776 692 12 1 286
- diluted 773 673 15 1 269
Dividend per share
(cents)
- declared out of 260 225 16 585
earnings for the period
Ordinary shares
- Issued net of 38 605 39 632 38 949 578
treasury shares 692 174
- Weighted-average 38 892 40 128 39 643 913
132 845
- Diluted weighted- 39 012 41 239 40 177 944
average 658 073
Net asset value per 30,76 26,84 15 28,28
share (rand)
Condensed Balance Sheet
Unaudited Unaudited Audited
six six 12
months months months
ended ended ended
31 March 31 March 30 Sept
2007 2006 Change 2006
R`000 R`000 % R`000
Assets
Non-current assets 1 289 032 1 031 974 1 182
692
Property, plant and 1 148 468 889 989 1 038
equipment 328
Intangible assets 139 969 139 678 141 725
Investments and loans 595 2 307 1 394
Deferred income tax - - 1 245
assets
Current assets 1 063 516 943 138 989 541
Inventories 222 516 190 630 198 228
Biological assets 263 079 193 438 214 354
Trade and other 499 367 486 358 448 031
receivables
Cash and cash 78 554 72 712 128 928
equivalents
Total assets 2 352 548 1 975 112 2 172
233
Equity and liabilities
Capital and reserves 1 187 341 1 063 759 1 101
attributable to equity 622
holders of the parent
company
Issued capital 19 701 206 697 93 711
Reserves 1 167 640 857 062 1 007
911
Minority interests 22 624 17 311 19 332
Total equity 1 209 965 1 081 070 1 120
954
Non-current liabilities 262 017 229 475 248 879
Borrowings 9 613 10 239 9 600
Deferred income tax 182 531 156 897 171 399
liability
Retirement benefit 69 873 62 339 67 880
obligations
Current liabilities 880 566 664 567 802 400
Trade and other 676 559 635 785 734 601
liabilities
Current income tax 39 221 25 901 55 787
liabilities
Short-term borrowings 164 786 2 881 12 012
Total liabilities 1 142 583 894 042 1 051
279
Total equity and 2 352 548 1 975 112 2 172
liabilities 233
Net surplus (95 845) 59 592 107 316
(debt)/cash
Condensed Cash Flow Statement
Unaudited Unaudited Audited
six six 12 months
months months
ended ended ended
31 March 31 March 30 Sept
2007 2006 Change 2006
R`000 R`000 % R`000
Cash operating profit 508 249 458 657 868 896
Working capital (182 377) (24 187) 84 384
changes
Cash generated from 325 872 434 470 953 280
operating activities
Net finance income 2 979 2 381 4 884
Income tax paid (155 062) (157 670) (234 434)
Cash flows from 173 789 279 181 723 730
operating activities
Cash used in (159 404) (97 769) (298 885)
investing activities
Cash generated for the 14 385 181 412 424 845
period
Cash used in financing (61 971) (175 667) (364 144)
activities
Proceeds from issue 3 764 921 6 117
of shares
Buy-back of shares (77 774) (79 434) (190 589)
Dividends paid (140 748) (106 291) (195 114)
- to the company`s (140 088) (103 757) (190 876)
shareholders
- to minority (660) (2 534) (4 238)
interests
Increase in 152 787 9 137 15 442
borrowings
Net (decrease)/increase (47 586) 5 745 60 701
in cash and cash
equivalents
Effects of exchange (2 788) 1 434 2 694
rate changes
Cash and cash 128 928 65 533 65 533
equivalent balances at
beginning of year
Cash and cash 78 554 72 712 128 928
equivalent balances at
end of period
Condensed Statement of Changes in Equity
Unaudited Unaudited Audited
six six 12
months months months
ended ended ended
31 March 31 March 30 Sept
2007 2006 Change 2006
R`000 R`000 % R`000
Balance beginning of 1 120 954 983 192 983 192
year
Profit for the period 305 956 281 302 516 498
Movement in currency (2 201) 1 446 974
translation difference
during the period
Dividends declared (140 734) (106 357) (195
during the period 238)
Decrease in equity as (77 774) (79 434) (190
result of buy-back of 589)
shares
Shares issued 3 764 921 6 117
Balance at end of period 1 209 965 1 081 070 1 120
954
Segmental Information
Unaudite Unaudited Audited
d
six six 12 months
months months
ended ended ended
31 March 31 March 30 Sept
2007 2006 Change 2006
R`000 R`000 % R`000
Revenue
Animal Nutrition 1 628 1 244 232 31 2 669 705
558
Poultry 1 999 1 837 812 9 3 623 545
325
Inter group (699 (524 337) (1 109
692) 586)
2 928 2 557 707 14 5 183 664
191
Operating profit
Animal Nutrition 176 685 121 400 46 272 265
Poultry 279 475 293 045 (5) 493 688
456 160 414 445 10 765 953
Notes
1. Basis of preparation
This condensed interim financial statements for the six months ended 31
March 2007 have been prepared in accordance with IAS 34 - Interim Financial
Reporting, and the Listing requirements of the JSE Securities Exchange.
These financial statements have not been reviewed or audited by the Group`s
auditors.
2. Accounting policies
The accounting policies applied in this interim financial statements comply
with IFRS and are consistent with those applied in the preparation of the
Group`s annual financial statements for the year ended 30 September 2006.
3. Reclassification of feed sales to contract growers as revenue,
previously set off against cost of goods sold. The effect of the adjustment
is to increase revenue and cost of goods sold each by R125 million.
Unaudited Unaudited Audited
six months six 12
months months
ended ended ended
31 March 31 March 30 Sept
2007 2006 2006
R`000 R`000 R`000
4. Operating profit
The following items have
been accounted for in the
operating profit:
Biological assets - fair 1 882 727 710
value gain
Amortisation of intangible 1 876 2 252 2 969
assets
Depreciation on property, 48 644 41 743 85 766
plant and equipment
Profit on disposal of 436 698 47
property, plant and
equipment
Foreign exchange loss 462 280 390
5. Reconciliation to headline earnings
Earnings for the period 302 004 278 046 509 517
Profit on sale of (307) (495) (303)
property, plant and
equipment
Loss related to sale of - - 589
business unit
Headline earnings for the 301 697 277 551 509 803
period
6. Share capital
In terms of the share buy-back programme 736 886 shares were acquired
during the period under review at a total cost of R77 774 000.
In terms of the Group`s share incentive scheme, 393 000 shares were issued
in respect of share options exercised during the period under review.
7. Capital commitments
Capital expenditure approved 92 567 114 155 58 557
not contracted
Capital expenditure 114 429 107 611 65 628
contracted not recognised in
financial statements
Financial Overview
Results for the six months showed a 12% improvement over the corresponding
period despite a significant increase in raw material costs.
Revenue increased by 14% from R2 558 million to R2 928 million and
operating profit by 10% from R414 million to R456 million. Poultry
operating profit was down 5% whilst Animal Nutrition showed a healthy
increase of 46% on last year. The Group`s operating margin of 15,6% was
down on last year`s 16,2%.
Net finance income for the current period includes R3,6 million interest
received from a VAT refund.
The effective tax rate (inclusive of STC) of 33,4% is up on last year`s
32,5% mainly from higher STC resulting from the reduction of the dividend
cover.
The negative cash flow for the period of R203 million was due to a R182
million increase in working capital (the impact of the higher maize price
on inventory, debtor levels and an unusually high level of import creditors
at 30 September 2006), together with a high level of capital expenditure
(R159 million mainly on the Earlybird expansion).
Headline earnings per share increased by 12% from 692 cents per share to
776 cents.
An interim dividend of 260 cents per share has been declared compared to
last year`s 225 cents, an increase of 15,6%.
Operational Overview
Animal Nutrition Division
The South African maize producing industry has experienced its worst
drought for over 30 years with the expected 10 million ton crop reduced to
our estimate of 7,5 million tonnes with the result that the domestic price
of maize, the Group`s major input cost, continued its upward trend into the
current financial year. Yellow maize increased in price from R1 250 per ton
at end September 2006 to R1 800 per ton end March 2007, after having peaked
at almost R2 000 per ton during February 2007. The average Safex based
maize price over the corresponding period last year escalated by 76%.
International prices for maize also increased sharply as the demand for
ethanol production increased dramatically.
Revenue increased by 31% to R1 628 million (2006: R1 244 million) driven by
the raw material prices and a 4% increase in volumes. Operating profit
increased by 46% to R177 million (2006: R121 million) and margins from 9,8%
to 10,9%. Operating costs were well contained. NuTec SA and National
Veterinary Supplies reported excellent results, but the Zambian operation
reported lower results due to currency devaluation.
Poultry Division
Demand for chicken has been stimulated for some time by high red meat
prices and fish shortages. Imported poultry remains a strong competitor,
supplying in excess of 20% of domestic demand. Selling price of poultry
meat increased by 7%, insufficient to compensate for the 27% increase in
feed prices during the period. Sales volumes increased by 2%.
While revenue increased by 9% to R1 999 million (2006: R1 838 million),
operating profit fell by 5% during the period to R279 million (2006: R293
million) due to the increased feed price. Operating margins dropped as a
result from 16,0% to 14,0%. Ross Poultry Breeders and National Chicks
reported improved results.
Two major capital expansion projects are underway at Earlybird. The first
to increase production from 2,1 million broilers per week to 2,5 million
and the second to improve product mix and flexibility in the plants, at a
total cost of R358 million. The projects are well underway and expected to
be fully operational during the last quarter of the current financial year.
Board appointments
Dr Theuns Eloff and Dr Nombasa Tsengwa have been appointed to the board.
Prospects
Margins are expected to remain under pressure during the second half but
the benefits of the expansion projects should start to flow through during
the last quarter.
An improvement in earnings is anticipated for the full year.
Declaration of Ordinary Dividend No. 13
Notice is hereby given that dividend no.13 of 260 cents per ordinary share
has been declared in respect of the six months ended 31 March 2007.
Last date to trade cum- Friday, 29 June 2007
dividend
Shares commence trading ex- Monday, 2 July 2007
dividend
Record date Friday, 6 July 2007
Payment of dividend Monday, 9 July 2007
Share certificates may not be dematerialised or rematerialised between
Monday, 2 July 2007 and Friday, 6 July 2007, both days inclusive.
On behalf of the board
J L van den Berg N C Wentzel
Chairman Chief Executive Officer
Pretoria
14 May 2007
Registered office
Block 9, The Boardwalk Office Park,
107 Haymeadow Crescent,
Fearie Glen,
Pretoria, 0043
Postnet 329,
Private Bag X10,
Elarduspark, 0048
Telephone: (012) 990-8260
Website address: www.astralfoods.com
Directors
J L van den Berg (Chairman)
*N C Wentzel (Chief Executive Officer),
*T Pritchard (Financial Director)
*M A Kingston, *C E Schutte, J J Geldenhuys,
C G van Veyeren, T Eloff, N Tsengwa
M Macdonald, T C C Mampane
(*Executive director)
Company Secretary
M Eloff
Transfer secretaries
Computershare Investor Services 2004 (Pty) Limited
PO Box 61051
Marshalltown, 2107
Telephone: (011) 370-5000
Sponsor
J.P.Morgan Equities Limited
(Johannesburg Branch)
1 Fricker Road, Illovo
Johannesburg, 2146
Private Bag X9936
Sandton, 2146
Telephone: (011) 507-0430
Date: 15/05/2007 08:00:01 Supplied by www.sharenet.co.za
Produced by the JSE SENS Department.
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