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ARL - Astral Foods - Unaudited Interim Results and Dividend Declaration for the

Release Date: 13/05/2009 07:05
Code(s): ARL
Wrap Text

ARL - Astral Foods - Unaudited Interim Results and Dividend Declaration for the Six Months Ended 31 March 2009 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 2009 Highlights - Operating profit decrease 32% - Earnings per share decrease 39% - Interim dividend unchanged at 260 cps Condensed Group Income Statement Unaudited Unaudited Audited six months six months 12 months
ended ended ended 31 March 31 March 30 Sept 2009 2008 Change 2008 R`000 R`000 % R`000
Revenue 4 462 220 3 769 363 18 8 184 205 Operating profit 279 018 407 582 (32) 547 786 (note 3) Net finance costs (29 842) (17 535) (70) (49 401) Profit before 249 176 390 047 (36) 498 385 income tax Income tax (86 246) (123 349) (164 159) expense Profit for the 162 930 266 698 (39) 334 226 period Attributable to: Equity holders of 158 478 263 044 (40) 327 261 the parent company Minority 4 452 3 654 22 6 965 interests Profit for the 162 930 266 698 (39) 334 226 period Earnings per share (cents) - basic 417 688 (39) 858 - diluted 416 687 (39) 858 Additional information Headline earnings 154 247 262 689 (41) 320 385 (R`000) (note 4) Headline earnings per share (cents) - basic 405 687 (41) 840 - diluted 405 686 (41) 840 Dividend per share (cents) - declared out of 260 260 - 700 earnings for the period Ordinary shares - Issued net of 38 047 708 38 027 508 38 047 708 treasury shares - Weighted- 38 047 708 38 229 800 38 134 718 average - Diluted 38 050 048 38 282 369 38 157 365 weighted-average Net asset value per 33,27 34,76 (4) 34,24 share (Rand) Condensed Group Balance Sheet Assets Non-current assets 1 638 906 1 507 326 1 614 525 Property, plant 1 490 459 1 352 573 1 462 364 and equipment Intangible assets 10 011 13 884 12 251 Goodwill 124 802 123 548 124 802 Investments and 13 634 2 873 13 184 loans Derivative - 9 102 - financial instruments Deferred income - 5 346 1 924 tax assets Current assets 1 481 192 1 394 031 1 542 689 Inventories 281 791 262 116 300 124 Biological assets 333 871 312 780 318 218 Trade and other 727 307 683 742 723 128 receivables Current income 8 809 28 091 33 924 tax asset Derivative 4 255 9 966 7 201 financial instruments Cash and cash 125 159 97 336 160 094 equivalents Total assets 3 120 098 2 901 357 3 157 214 Equity and liabilities Capital and 1 265 905 1 321 999 1 302 887 reserves attributable to equity holders of the parent company Issued capital 736 421 736 Treasury shares (204 435) (201 646) (204 435) Reserves 1 469 604 1 523 224 1 506 586 Minority 17 834 21 765 25 263 interests Total equity 1 283 739 1 343 764 1 328 150 Non-current 425 537 350 716 390 223 liabilities Borrowings 20 562 6 209 19 757 Deferred income 334 894 276 948 301 756 tax liability Retirement 70 081 67 559 68 710 benefit obligations Current liabilities 1 410 822 1 206 877 1 438 841 Trade and other 963 101 725 279 1 102 500 liabilities Current income 14 920 20 644 9 471 tax liabilities Borrowings 432 801 460 954 326 870 Total liabilities 1 836 359 1 557 593 1 829 064 Total equity and 3 120 098 2 901 357 3 157 214 liabilities Net debt 328 204 369 827 186 533 (Borrowings less cash and cash equivalents) Condensed Group Cash Flow Statement Cash operating 327 437 453 886 660 736 profit Working capital (139 547) (174 365) 111 433 changes Cash generated from 187 890 279 521 772 169 operating activities Income tax paid (20 997) (104 854) (133 138) Cash flows from 166 893 174 667 639 031 operating activities Net cash used in (107 226) (132 496) (269 803) investing activities Cash generated for 59 667 42 171 369 228 the period Cash used in (202 503) (246 801) (382 249) financing activities Interest paid (33 945) (17 535) (68 827) Dividends to the (167 316) (167 888) (266 738) company`s shareholders Payments to (1 592) (2 339) (2 331) minority interest holders 350 (33) 14 352
Increase/(decrease) in borrowings Proceeds from - 137 441 issuance of shares Shares - (59 143) (59 146) repurchased Net decrease in (142 836) (204 630) (13 021) cash and cash equivalents Effects of 1 515 (6 481) 3 512 exchange rate changes Cash and cash - - (2 621) equivalents from acquisition of subsidiary Cash and cash (162 171) (150 041) (150 041) equivalent balances at beginning of year Cash and cash (303 492) (361 152) (162 171) equivalent balances at end of period Condensed Group Statement of Changes in Equity Balance at 1 328 150 1 307 513 1 307 513 beginning of year Profit for the 162 930 266 698 334 226 period Movement in (11 543) (4 053) 8 789 currency translation difference during the period Dividends to the (167 410) (167 981) (266 905) company`s shareholders Payments to (1 592) (2 339) (2 331) minority interest holders Decrease in equity - (59 143) (59 146) as result of share repurchases Shares issued - 137 441 Option value of 1 174 2 932 5 563 share options granted Cost of minority (27 970) - - interest in a subsidiary acquired (note 5) Balance at end of 1 283 739 1 343 764 1 328 150 period Segment Information Revenue Animal Nutrition 2 689 154 2 193 819 23 5 138 064 - South Africa 2 525 789 2 058 723 23 4 825 052 - Other Africa 163 365 135 096 21 313 012 - Intergroup (890 150) (792 241) (1 774 073) Poultry - South Africa 2 899 518 2 562 308 13 5 099 284 and Swaziland - Intergroup (236 302) (194 523) (279 070) 4 462 220 3 769 363 18 8 184 205 Operating profit Animal Nutrition 141 799 224 498 (37) 384 922 - South Africa 129 872 201 583 (36) 339 052 - Other Africa 11 927 22 915 (48) 45 870 Poultry 137 219 183 084 (25) 162 864 279 018 407 582 (32) 547 786 Notes 1. Basis of preparation This condensed interim financial statements for the six months ended 31 March 2009 have been prepared in accordance with IAS 34 - Interim Financial Reporting and the Listing Requirements of the JSE Limited. 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 IAS 34 and are consistent with those applied in the preparation of the group`s annual financial statements for the year ended 30 September 2008, except for the early adoption of IAS 27(R) and IFRS 3(R). The effect on the group of the adoption of IAS 27 (R) and IFRS 3(R) impacted on the recording of transactions with minorities. The adoption had no effect on the reported profits of the group, however the total equity was reduced by R18 million in respect of the acquisition of a minority interest in a business unit. Unaudited Unaudited Audited six months six months 12 months ended ended ended
31 March 31 March 30 Sept 2009 2008 2008 R`000 R`000 R`000 3. Operating profit The following items have been accounted for in the operating profit: Biological assets - fair (740) 1 203 1 231 value (loss)/gain Amortisation of intangible 2 555 2 282 4 744 assets Depreciation on property, 47 795 38 599 84 191 plant and equipment Profit on disposal of 4 476 564 8 609 property, plant and equipment Foreign exchange loss 9 066 1 223 338 4. Reconciliation to headline earnings Earnings for the period 158 478 263 044 327 261 After tax profit on sale of (4 231) (355) (7 371) property, plant and equipment Impairment of assets - - 495 Headline earnings for the 154 247 262 689 320 385 period 5. Minority interest acquired The minority interest in Elite Breeding Farms was acquired during the period under review. The total cost includes the cash amount paid, deferred tax and settlement of amounts owed to Elite Breeding Farms. R10 million of the total cost was debited against minority interest, and R18 million against reserves attributable to equity holders of the parent company. 6. Capital commitments Capital expenditure approved 46 351 109 572 84 856 not contracted Capital expenditure 25 458 61 136 24 417 contracted not recognised in financial statements 7. Contingent liabilities A referral was made to the Competition Tribunal regarding alleged anti- competitive conduct by Astral Operations Limited and Elite Breeding Farms during 2008. The group is opposing the referral. Financial Overview The group recorded a strong recovery in profit (R163 million) during this six months compared to the immediately preceding six month period (R68 million). However, the profit for the current period was 39% below the R267 million for the first half of last year. Revenue increased by 18% from R3 769 million to R4 462 million largely due to the increase in agricultural input costs. Operating profit at R279 million was 32% lower than last year`s R407 million: Animal Nutrition down 37% and Poultry 25%. Operating margin dropped from 10,8% to 6,3%. Net finance costs of R30 million were up on the previous period`s R17 million. Earnings per share down 39% from 688 cents to 417 cents. Cash flows from operating activities of R167 million were only marginally lower than the R175 million for the comparable period due to a lower increase in working capital and a significantly lower tax payment resulting from the expansion tax allowances. Net debt of R328 million reduced by some R40 million with the net debt/equity ratio reducing from 27,5% to 25,6%. The Board has declared an unchanged interim dividend of 260 cents per share in view of the group`s cash flow generating capabilities, strong balance sheet and the prospect of improved trading conditions. Operational Overview Poultry Division Gross revenue increased by 13% to R2 899 million (2008: R2 562 million) despite a 7% drop in sales volumes following a decision to reduce the slaughter age of birds due to the high feed costs. However, increases in selling prices were insufficient to recover increases in feed costs, resulting in profit margins coming under pressure. Operating profit fell by 25% from the comparable period`s R183 million to R137 million. Animal Nutrition Division Gross revenue increased by 23% to R2 689 million (2008: R2 194 million). High agricultural commodity input prices remained the main driving force behind the increase with costs 20% higher than the comparable period. Due to the volatility in the international markets towards the end of last year, the division took a conservative view on the procurement of raw materials and as a result could not immediately benefit from the fall in maize price. Volumes for the period were down by 10% mainly due to the lower off take by the Poultry Division. The Zambian profits were impacted by a foreign currency loss of R7,5 million due to the weakening of the Zambian currency. Operating profit of R142 million (R2008: R224 million) was down by 37% and operating margins fell from 10,2% to 5,3% compared to the comparable period as a result of the inability to pass on the full increase in raw material costs. Changes in directorate Nick Wentzel, chief executive officer of the group, resigned at the end of April 2009 and Chris Schutte, Managing Director of the Animal Feed Division, was appointed as his successor. Chris joined Astral in 2002, after a successful career in the poultry industry, and has led the Animal Feed Division very effectively over the past seven years. Three other executives have been appointed to the Board: - Theo Delport, previously Chief Operating Officer of County Fair poultry division and subsequently marketing director for Poultry, as Executive Director of the Poultry Division; - Daan Ferreira, Group Financial Manager since 2001, as Group Financial Director; and - Dr Obed Lukhele, previously Group Veterinary Manager, as Group Technical Director. Nick Wentzel has played a key role in driving Astral since its listing in 2001 to its present status as one of the leading food groups in South Africa. The Board expresses its gratitude to him for his great achievement and for building up a very strong team to take the group forward. Everyone at Astral wishes him every success in the future. Prospects The significant decline in the price of agricultural commodities, specifically maize, during recent months will have a positive impact on margins during the second half of the year. Earnings for the full year are expected to exceed those for last year. The forecast financial information has not been reviewed and reported on by Astral Foods` auditors. Declaration of Ordinary Dividend No. 17 Notice is hereby given that dividend no.17 of 260 cents per ordinary share has been declared in respect of the six months ended 31 March 2009. Last date to trade cum dividend Thursday, 11 June 2009 Shares commence trading ex dividend Friday, 12 June 2009 Record date Friday, 19 June 2009 Payment of dividend Monday, 22 June 2009 Share certificates may not be dematerialised or rematerialised between Friday, 12 June 2009 and Friday, 19 June 2009, both days inclusive. On behalf of the Board J J Geldenhuys C E Schutte Chairman Chief Executive Officer Pretoria 13 May 2009 Registered office Block 9, The Boardwalk Office Park 107 Haymeadow Crescent, Faerie Glen, Pretoria, 0043 Postnet 329, Private Bag X10, Elarduspark, 0048 Telephone: (012) 990-8260 Website address: www.astralfoods.com Directors J J Geldenhuys (Chairman) *C E Schutte (Chief Executive Officer) *T Delport, *D D Ferreira (Financial Director) *Dr O M Lukhele, M Macdonald, T C C Mampane, Dr T Eloff, Dr N Tsengwa (*Executive director) Company Secretary M Eloff Transfer secretaries Computershare Investor Services (Pty) Limited PO Box 61051 Marshalltown, 2107 Telephone: (011) 370-5000 Sponsor JP Morgan Equities Limited 1 Fricker Road, Illovo Johannesburg, 2196 Private Bag X9936 Sandton, 2146 Telephone: (011) 507-0430 Date: 13/05/2009 07:05:02 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. 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