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ASTRAL FOODS LIMITED - Trading Statement

Release Date: 30/01/2013 14:54
Code(s): ARL     PDF:  
Wrap Text
Trading Statement

ASTRAL FOODS LIMITED
“Astral Foods”
(Reg. No. 1978/003194/06)
(Incorporated in the Republic of South Africa)
Share Code: ARL
ISIN Code: ZAE000029757


TRADING STATEMENT

In terms of rule 3.4(b) of the JSE Listings Requirements,
a listed company is required to publish a trading
statement as soon as a reasonable degree of certainty
exists that the financial results for the next reporting
period to be reported on will differ by at least 20% from
those of the previous corresponding period.

30 January 2013: Astral Foods Limited (Astral), one of
South Africa’s leading poultry producers, recorded its
worst trading performance in its history as a listed
entity, over the first quarter of the 2013 financial
year-end, which included the 2012 Festive Season.
Astral’s operating profit for the first quarter ended 31
December 2012, was 60% lower than the corresponding
period. Astral’s Chief Executive Officer, Chris Schutte
said: “During our 2012 year-end results road show, we
indicated that we were expecting poor trading conditions
to prevail for the first half of the 2013 financial year-
end. Unfortunately, the trading conditions during the
first quarter of the 2013 financial year were more severe
than anticipated. Indications are that the second quarter
performance will be much worse than the first quarter and
as a result, Astral’s results for the six months ending
31 March 2013 will be severely impacted.”

The factors that negatively influenced Astral’s Poultry
Division over the first quarter of 2013, and set to
continue over the second quarter of 2013, include the
high input costs relating to maize and soya procured at
historic record price levels and only now being reflected
in the production cost of poultry. The Poultry Division’s
ability to recover the high input costs in a depressed
consumer environment was severely hampered by record
poultry imports from Brazil and Europe, and subsequent
high local poultry stocks led to excessive margin
pressure over the same period. Astral’s Feed and other
African Divisions continue to report good performances.
Astral has a reasonable degree of certainty, considering
the current market environment, that earnings per share
and headline earnings per share for the six months ending
31 March 2013 will be down between 45% and 65% and 75%
and 95% respectively, versus the six months ended 31
March 2012. The results, on which this trading statement
was based, were not audited or reviewed by the Group’s
auditors.

In light of the severe drop in forecast headline earnings
the likelihood of payment of an interim dividend is
uncertain.    The Board of directors will give final
consideration to the interim dividend at the Board
meeting approving the financial results for the six
months ending 31 March 2013.

Between   November   2012   and  January   2013,  Astral
experienced violent strike action by unionised labour in
the Western Cape as well as in Gauteng. As a result of
this action, Astral experienced one fatality, six farms
were affected by vandalism and three poultry sheds were
burnt down by the strikers, in the process killing
approximately 65,000 chickens. The damage to the poultry
assets and resultant impact on production could lead to
jobs being cut. The direct costs of the strikes are
estimated to be in excess of R35 million. Operations in
both regions are back to normal.

“More favourable feed costs are expected for the second
half of the 2013 financial year and should be a major
factor in reversing the Poultry Division’s outlook.
Astral is continuing with various operational cost-saving
initiatives and also foresee improved trading conditions
for the second half of the 2013 financial year,”
concluded Schutte.


                          Ends


Contact:           Astral Foods Limited
                   Chris Schutte (CEO of Astral Foods
                   Limited)
                   Tel: (012) 667-5468
                   Daan Ferreira (GFD of Astral Foods
                   Limited)
                   Tel: (012) 667-5468

Issued and released by: Keyter Rech Investor Solutions
                    Marlize Keyter (011) 447-5204 /
                    083 701 2021
Issue date:             Wednesday 30 January 2013

JSE code:               ARL

Web-site:               www.astralfoods.com

Sponsor: J.P. Morgan Equities South Africa Proprietary
Limited


Company background

Astral Foods Limited (Astral), a leading South African
integrated poultry producer, with key activities in
animal feed pre-mixes, manufacturing of animal feeds,
broiler genetics, production and sale of day-old chicks
and hatching eggs, with integrated breeder and broiler
production operations, abattoirs as well as sales and
distribution of various key poultry brands. The brands in
the Astral stable include:

  •   Earlybird                     •   TIGERChicks (Zambia)

  •   Festive                       •   Meadow Feeds

  •   Goldi                         •   Meadow Feeds Mozambique

  •   County Fair                   •   Tiger    Animal   Feeds
                                        (Zambia)

  •   Mountain Valley               •   Nutec

  •   Ross Poultry Breeders         •   Central      Analytical
                                        Laboratories

  •   National Chicks               •   MOZPINTOS (Mozambique)

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