Wrap Text
Audited Annual Financial Results and Dividend Declaration for the year ended 30 September 2012
Astral Foods Limited
Incorporated in the Republic of South Africa
Registration number 1978/003194/06
Share code: ARL
ISIN: ZAE000029757
AUDITED ANNUAL FINANCIAL RESULTS
and DIVIDEND DECLARATION
30 September 2012
- Revenue up 13%
- Earnings per share down 23%
- Headline earnings per share down 31%
- Final dividend 336 cents per share
- Total dividend for the year down 17%
CONDENSED GROUP STATEMENT OF FINANCIAL POSITION
Audited Audited Audited
Year ended Year ended Year ended
30 Sept 2012 30 Sept 2011 30 Sept 2010
Restated Restated
R'000 R'000 R'000
ASSETS
Non-current assets 1 840 046 1 876 789 1 764 194
Property, plant and equipment 1 678 976 1 711 966 1 625 473
Intangible assets 17 169 11 120 4 913
Goodwill 136 135 140 401 124 802
Investments and loans 7 766 13 028 8 838
Deferred tax asset 274 168
Current assets 1 672 894 1 548 041 1 365 712
Inventories 379 433 321 031 262 278
Biological assets 534 806 450 130(#) 407 398(#)
Trade and other receivables 723 569 594 376(#) 553 266(#)
Current tax assets 9 819 429 2 334
Derivative financial instruments 210 196
Cash and cash equivalents 25 267 181 865 140 240
Assets held for sale 51 889 26 928
Total assets 3 564 829 3 424 830 3 156 834
EQUITY AND LIABILITIES
Capital and reserves attributable
to equity holders of the
parent company 1 585 227 1 574 194 1 424 091
Issued capital 2 044 2 044 736
Treasury shares (204 435) (204 435) (204 435)
Reserves 1 787 618 1 776 585 1 627 790
Non-controlling interests 10 744 11 438 22 106
Total equity 1 595 971 1 585 632 1 446 197
Liabilities
Non-current liabilities 516 367 569 100 522 117
Borrowings 14 859 99 496 80 545
Deferred tax liability 407 711 378 950 356 929
Retirement benefit obligations 93 797 90 654 84 643
Current liabilities 1 431 208 1 270 098 1 176 742
Trade and other liabilities 1 307 776 1 139 400(#) 967 545(#)
Current tax liabilities 5 684 7 316 19 556
Borrowings 116 091 121 891 188 668
Shareholders for dividend 1 657 1 491 973
Liabilities held for sale 21 283 11 778
Total liabilities 1 968 858 1 839 198 1 710 637
Total equity and liabilities 3 564 829 3 424 830 3 156 834
(#) Restated refer notes 3 and 13.
CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME
Audited Audited
Year ended Year ended
30 Sept 2012 30 Sept 2011
Change Restated
R'000 % R'000
Revenue 8 160 078 13 7 227 184(#)
Operating profit 477 149 (29) 674 919
Profit on sale of interest in business unit 35 972
Fair value adjustment of net investment in assets
and liabilities held for sale (1 805)
Profit before interest and tax 513 121 (24) 673 114
Finance income 6 396 12 676
Finance costs (24 371) (27 849)
Profit before tax 495 146 (25) 657 941
Tax expense (162 646) (222 679)
Profit for the year 332 500 (24) 435 262
Other comprehensive income
Foreign currency translation adjustments 102 13 555
Total comprehensive income for the year 332 602 (26) 448 817
Profit attributable to:
Equity holders of the parent company 329 335 (23) 429 217
Non-controlling interests 3 165 (48) 6 045
332 500 (24) 435 262
Comprehensive income attributable to:
Equity holders of the parent company 329 473 (25) 441 278
Non-controlling interests 3 129 (58) 7 539
332 602 (26) 448 817
Earnings per share (cents)
basic 865 (23) 1 128
diluted 864 (23) 1 126
(#) Restated refer notes 3 and 13.
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
Audited Audited
Year ended Year ended
30 Sept 2012 30 Sept 2011
R'000 R'000
Balance beginning of the year 1 585 632 1 446 197
Total comprehensive income for the year 332 602 448 817
Dividends to the company's shareholders (320 086) (294 909)
Payments to non-controlling interest holders (3 829) (4 571)
Option value of share options granted 1 652 2 790
Shares issued 1 308
Cost of non-controlling interest in a subsidiary acquired (14 000)
Balance at end of the year 1 595 971 1 585 632
CONDENSED GROUP SEGMENTAL ANALYSIS
Audited Audited
Year ended Year ended
30 Sept 2012 30 Sept 2011
Change Restated
R'000 % R'000
Revenue
Poultry
South Africa and Swaziland 5 914 483 12 5 257 636(#)
Feed 4 571 277 24 3 684 161
South Africa 4 309 636 24 3 478 316(#)
Other Africa 261 641 27 205 845
Services and ventures 239 996 (13) 275 902
Inter-group (2 565 678) (1 990 515)
Feed to Poultry (2 413 486) (1 906 132)
Services and Ventures to Poultry and Feed (152 192) (84 383)
8 160 078 13 7 227 184(#)
Operating profit
Poultry
South Africa and Swaziland 144 893 (59) 353 193
Feed 313 357 11 282 329
South Africa 283 135 10 257 536
Other Africa 30 222 22 24 793
Services and Ventures 18 899 (52) 39 397
477 149 (29) 674 919
Capital expenditure
Poultry
South Africa and Swaziland 152 248 47 103 700
Feed 52 418 74 30 051
South Africa 31 312 25 25 040
Other Africa 21 106 321 5 011
Services and Ventures 6 745 (60) 16 977
211 411 40 150 728
Depreciation, amortisation and impairment
Poultry
South Africa and Swaziland 92 804 12 82 961
Feed 22 168 6 20 977
South Africa 17 536 7 16 459
Other Africa 4 632 3 4 518
Services and Ventures 7 711 (49) 15 187
122 683 3 119 125
Assets
Poultry
South Africa and Swaziland 2 830 780 11 2 561 739(#)
Feed 958 341 25 764 062
South Africa 825 049 27 649 227
Other Africa 133 292 16 114 835
Services and Ventures 4 949 (99) 368 044
Assets held for sale 51 889
Set-off of inter-group balances (281 130) (269 015)
3 564 829 4 3 424 830
Liabilities
Poultry
South Africa and Swaziland 1 204 362 (16) 1 440 797(#)
Feed 848 650 56 545 408
South Africa 787 266 62 485 354
Other Africa 61 384 2 60 054
Services and Ventures 175 693 44 122 008
Liabilities held for sale 21 283
Set-off of inter-group balances (281 130) (269 015)
1 968 858 7 1 839 198
(#) Restated refer notes 3 and 13.
CONDENSED GROUP STATEMENT OF CASH FLOWS
Audited Audited
Year ended Year ended
30 Sept 2012 30 Sept 2011
R'000 R'000
Cash operating profit 596 964 809 169
Changes in working capital (118 852) 27 782
Cash generated from operations 478 112 836 951
Income tax paid (142 072) (214 564)
Cash generated from operating activities 336 040 622 387
Cash used in investing activities (116 583) (193 261)
Capital expenditure (209 274) (147 556)
Finance income 6 396 12 676
Acquisition of business unit (82 261)
Proceeds on disposal of business unit/investment
held for sale 83 161 13 935
Proceeds on disposal and other 3 134 9 945
Cash flows to financing activities (349 848) (337 654)
Net increase in borrowings 409 5 021
Interest paid (26 508) (31 021)
Cost of minority interest acquired (14 000)
Dividends paid (323 749) (298 962)
Shares issued 1 308
Net movement in cash and cash equivalents (130 391) 91 472
Effects of exchange rate changes (206) 6 938
Cash and cash equivalent balances
at beginning of the year 69 416 (28 994)
Cash and cash equivalent balances
at end of the year (61 181) 69 416
ADDITIONAL INFORMATION
Audited Audited
Year ended Year ended
30 Sept 2012 Change 30 Sept 2011
R'000 % R'000
Headline earnings 299 723 (31) 436 697
Headline earnings per share (cents)
basic 787 (31) 1 148
diluted 787 (31) 1 145
Dividend per share (cents)
declared out of earnings for the year 672 (17) 810
Ordinary shares
issued net of treasury shares 38 060 308 38 060 308
weighted-average 38 060 308 38 055 446
diluted weighted-average 38 096 321 38 124 355
Net debt (borrowings less cash and cash equivalents) 105 683 39 522
Net asset value per share (Rand) 41,65 1 41,36
NOTES
1. Nature of business
Astral is a leading South African integrated poultry producer. Key activities consist of animal feed pre-mixes,
manufacturing of animal feeds, broiler genetics, production and sale of day-old chicks and hatching eggs,
integrated breeder and broiler production operations, abattoirs and sales and distribution of various key poultry
brands.
2. Basis of preparation
The condensed consolidated financial information announcement is based on the audited financial statements
of the group for the year ended 30 September 2012 which have been prepared in accordance with International
Financial Reporting Standards ("IFRS"), IAS 34 Interim Financial Reporting, the Listings Requirements of the
JSE Limited and the South African Companies Act (2008). The financial statements have been prepared by the
financial director, DD Ferreira, CA(SA), and were approved by the board on 7 November 2012.
3. Restatement of comparative amounts for prior periods
Transactions with contract growers have been regarded as third party sales in the past and were recognised in
revenue. The outstanding amount of these sales was disclosed as trade receivables. This disclosure reflected
the legal right of ownership of the goods transferred and were based on technical accounting opinions.
Following a re-assessment of these transations in conjunction with the group's external auditors it was
concluded that the contract growers should be regarded as suppliers rather than customers of the group. The
impact of this revised interpretation is that on transfer of goods no sale should be recognised in revenue, and
the goods transferred should be disclosed as biological assets and the contract growers are affectively paid a
fee for rearing the birds.
There is no impact on prior period reported profits as the adjustment to revenue is offset by an adjustment to
cost of sales, and the adjustment to trade receivables are offset by adjustment to biological assets and trade
payables.
Details of the impact on prior period disclosure is as per note 13.
4. Accounting policies
The accounting policies applied in the 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 2011.
5. Independent audit by the auditors
These condensed consolidated results have been audited by our accredited auditors PricewaterhouseCoopers
Inc. who have performed their audit in accordance with the International Standards on Auditing. A copy of their
unqualified audit report is available for inspection at the registered office of the company.
Audited Audited
Year ended Year ended
30 Sept 2012 30 Sept 2011
R'000 R'000
6. Operating profit
The following items have been accounted for
in the operating profit:
Directors' remuneration 25 150 15 318
Cash-settled share-based payments fair value loss 1 049
Biological assets fair value (loss)/gain (752) 2 620
Amortisation of intangible assets 2 405 2 679
Depreciation on property, plant and equipment 116 296 115 251
Impairment of goodwill 3 012
Impairment of property, plant and equipment 970 1 302
Profit/(loss) on sale and scrapping of property,
plant and equipment 885 (6 338)
Foreign exchange (loss)/gain (1 744) 1 214
7. Reconciliation to headline earnings
Earnings for the year 329 335 429 217
(Profit)/loss on sale and scrapping of property,
plant and equipment (net of tax) (1 705) 4 392
Profit on sale of business unit (net of tax) (29 646)
Fair value adjustment of investment held for sale 1 805
Insurance recovery on damaged assets (net of tax) (3 044)
Impairment of goodwill 3 012
Loss on assets scrapped (net of tax) 1 073 132
Impairment of property (net of tax) 698
Impairment of assets (net of tax) 1 151
Headline earnings for the year 299 723 436 697
8. Cash and cash equivalents per cash flow statement
Bank overdrafts (included in current borrowings) (102 602) (112 449)
Cash at bank and in hand 25 267 181 865
Cash and cash equivalents classified as held for sale 16 154
Cash and cash equivalents per cash flow statement (61 181) 69 416
9. Share capital
No shares were repurchased in terms of the share buy-back
programme during the year (2011: nil).
No shares were issued in terms of the group's share
incentive scheme during the period under review
(2011: 12 600 shares).
10. Capital commitments
Capital expenditure approved not contracted 254 845 142 769
Capital expenditure contracted not recognised
in financial statements 17 055 27 542
Audited Audited
Year ended Year ended
30 Sept 2012 30 Sept 2011
R'000 R'000
11. Related party transactions
Sales to joint ventures 263 1 517
Purchases from joint ventures 177 508 154 962
Receivables from joint ventures 2 991 3 882
Trade payables to joint ventures 11 385 15 654
12. Trading weeks
The reporting period for the poultry segment ends on the last Saturday of a financial year. This resulted in
a 53-week reporting period for 2012 (2011: 52 weeks).
The extra trading week yielded additional revenue and gross profit of R111 million and R10 million, respectively.
13. Effect of restatement of sales to contract growers
Trade Trade
Cost of Biological and other and other
Revenue sales assets receivables payables
2011 R'000 R'000 R'000 R'000 R'000
As previously disclosed 8 605 904 (7 079 662) 342 234 662 836 (1 099 964)
Reclassification (1 378 720) 1 378 720 107 896 (68 460) (39 436)
Restated 7 227 184 (5 700 942) 450 130 594 376 (1 139 400)
2010
As previously disclosed 305 430 626 698 (939 009)
Reclassification 101 968 (73 432) (28 536)
Restated 407 398 553 266 (967 545)
FINANCIAL OVERVIEW
Headline earnings for the year decreased by 31% to R300 million from last year's R437 million, as a result of lower
profitability from the poultry operations.
Group revenue increased by 12,9% from R7 227 million to R8 160 million, due to higher sales realised by both the
poultry and feed segments.
The group's profits were severely affected by lower profitablity in the poultry segment, in spite of improved
profits reported from the feed segment. This resulted in the group's operating profit reducing 29,3% to
R477 million with the operating profit margin at 5,8% down on the previous year's 9,3%. The profit before tax
was down by 24,7% to R495,0 million which includes R35,9 million profit in respect of the sale of the interest in
East Balt which was sold for a consideration of R96,0 million.
Net interest paid for the year increased to R18 million from last year's R15 million as a result of increased average
borrowings throughout the year.
Cash generated from operations for the year of R478 million was 43% down on last year's R837 million due
to lower profits and higher working capital. Increased costs of raw materials resulted in increased values of
working capital and there were high finished goods stock levels at year-end. The net debt to equity ratio was
however still at a healthy 6,6% (2011: 2,5%).
The group has entered into negotiations whereby half of its 50% interest in Nutec South Africa Pty Limited will
be sold. The assets and liabilities of Nutec, which were previously proportionally consolidated, have been disclosed
as held for sale.
The board has declared a final dividend of 336 cents, resulting in a total dividend out of the profit for the year of
672 cents (2011: 810 cents). The distribution will be supported by the strong balance sheet and underlying cash
flow generation capabilities.
OPERATIONAL OVERVIEW
Reclassification impact
Cognisance should be taken of the re-assessment of the classification of sales to contract growers (see note 13),
which has resulted in a restatement of the 2011 revenue. Although the 2011 profits were unaffected, the profit
margin for the group increased to 9,3% (previously stated as 7,8%).
Poultry division
Revenue for the division was up by 12,5% to R5 915 million (2011: R5 258 million) on the back of higher volumes
(up 4,7%) and pricing levels improving by 5,6%.
The higher volumes were due to an increase in the number of birds processed primarily as a result of the inclusion of
the Earlybird Camperdown (Mountain Valley) volumes for the full year, together with an extra trading week included
in the 2012 financial calendar (see note 12).
An increase in feed costs for the period (up 22,8%) impacted negatively on margins for the division which reflected
a decrease to 2,5% (2011: 6,7%) with operating profit decreasing by 59,0% to R145 million (2011: R353 million).
The year under review was also impacted by high poultry stock levels in the industry, high levels of poultry imports
(primarily from South America and more recently Europe) and depressed poultry selling prices. It was evident during
the second half of the reporting period that the poultry industry lacked pricing power, as can be intimated from the
extensive poultry promotional activity at prices below cost that was witnessed in order to manage stock levels. The
increase in feed costs, together with above inflationary increases in energy costs, culminated in a margin squeeze
and a significant deterioration in the profitability of Astral's poultry division.
Feed division
Revenue for the division increased by 24,1% to R4 571 million (2011: R3 684 million) as a result of higher feed prices
on the back of higher maize and soya pricing levels with stable sales volumes (up 0,1%), derived from an increase
in the inter-group requirement for poultry feed offset by a decrease in external feed sales.
The operating profit increased by 11% to R313 million (2011: R282 million) with an operating margin at 6,9%
(2011: 7,7%). The increase in the operating profit was mainly due to an increase in net margin realisations. The
local feed operations reported an increase in profitability of 9,9%, whilst the division's African operations reported
a healthy 21,9% increase in operating profit.
Services and Ventures
Revenue for the division decreased by 13% to R240,0 million (2011: R276,0 million) whilst operating profit
decreased by 52% to R18,9 million (2011: R39,4 million). Excluded from the results for 2012 is the second half profit
contribution from the East Balt SA operation, which was disposed of during the financial year. The provision for the
Competition Commission settlement also impacted negatively on the profits of this division.
COMPETITION COMMISSION
An all-inclusive agreement with the Competition Commission has been negotiated to settle all previous and current
matters and investigations, and is in the final stages of conclusion, with the settlement value of R17 million having
been fully provided for in the first half of the financial period under review. This agreement remains to be confirmed
as an order by the Competition Tribunal.
PROSPECTS
The business environment for the first half of the next reporting period is not expected to improve from prevailing
conditions. Maize and soya pricing as key cost drivers in feed and poultry will remain at higher levels with limited
ability to recover the increased production costs in a depressed consumer market, exacerbated by high levels of
poultry imports and an imbalance in supply and demand. Expected higher grain and oilseed plantings and normal
precipitation levels locally, could contribute to a reduction in feed input costs during the second half of the next
financial reporting period.
DECLARATION OF ORDINARY DIVIDEND No. 24
The board has approved a final dividend of 336 cents per ordinary share (gross) in respect of the year ended
30 September 2012.
The dividend will be subject to Dividends Tax that was introduced with effect from 1 April 2012. In accordance
with paragraphs 11.17(a)(i) to (x) and 11.17(c) of the JSE Listings Requirements, the following information is
disclosed:
- The dividend has been declared out of income reserves;
- The local Dividend Tax is 15% (fifteen percent);
- There are no Secondary Tax on Companies (STC) credits utilised;
- The gross local dividend is 336 cents per ordinary share for shareholders exempt from the Dividend Tax;
- The net local dividend is 285,6 cents per ordinary share for shareholders liable to pay Dividend Tax;
- Astral Foods Limited has currently 42 148 885 ordinary shares in issue (which includes 4 088 577 treasury shares);
and
Astral Foods Limited's income tax reference number is 9125190711.
Shareholders are advised of the following dates in respect of the final dividend:
Last date to trade cum-dividend Friday, 11 January 2013
Shares commence trading ex-dividend Monday, 14 January 2013
Record date Friday, 18 January 2013
Payment of dividend Monday, 21 January 2013
Share certificates may not be dematerialised or rematerialised between Monday, 14 January 2013 and Friday,
18 January 2013, both days inclusive.
On behalf of the board
JJ Geldenhuys CE Schutte
Chairman Chief Executive Officer
Pretoria
7 November 2012
Registered office
92 Koranna Avenue, Doringkloof, Centurion, 0157, South Africa
Postnet Suite 278, Private Bag X1028, Doringkloof, 0140
Telephone: +27 (0) 12 667 5468
Website address:
www.astralfoods.com
Directors
JJ Geldenhuys (Chairman), *CE Schutte (Chief Executive Officer), *GD Arnold, *T Delport, Dr T Eloff
*DD Ferreira (Financial Director), IS Fourie, *Dr OM Lukhele, M Macdonald, TCC Mampane, Dr N Tsengwa
(*Executive director)
Company Secretary
MA Eloff
Transfer secretaries
Computershare Investor Services (Pty) Limited
PO Box 61051, Marshalltown, 2107
Telephone: +27 (0) 11 370-5000
Sponsor
JPMorgan Chase Bank, N.A.
1 Fricker Road, Illovo, Johannesburg, 2196, Private Bag X9936, Sandton, 2146
Telephone: +27 (0) 11 507-0430
A copy of the financial statements will be available upon publication on the website, www.astralfoods.com or alternatively contact Maryna Eloff at the registered office or at maryna.eloff@astralfoods.com
Date: 12/11/2012 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
