Wrap Text
Audited Annual Financial Results and Dividend Declaration 30 September 2013
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 2013
REVENUE INCREASE 4%
EARNINGS PER SHARE DECREASE 26%
HEADLINE EARNINGS PER SHARE DECREASE 44%
FINAL DIVIDEND 222 CENTS PER SHARE
CONDENSED GROUP STATEMENT OF FINANCIAL POSITION
Audited Audited
Year ended Year ended
30 Sept 2013 30 Sept 2012
R'000 R'000
ASSETS
Non-current assets 2 016 064 1 840 046
Property, plant and equipment 1 796 461 1 678 976
Intangible assets 25 320 17 169
Goodwill 136 135 136 135
Investment in associate 52 800
Investments and loans 5 348 7 766
Current assets 1 938 270 1 672 894
Inventories 440 684 379 433
Biological assets 592 690 534 806
Trade and other receivables 806 821 723 569
Current tax assets 4 614 9 819
Cash and cash equivalents 93 461 25 267
Assets held for sale 51 889
Total assets 3 954 334 3 564 829
EQUITY AND LIABILITIES
Capital and reserves attributable to equity holders
of the parent company 1 713 726 1 585 227
Issued capital 2 044 2 044
Treasury shares (204 435) (204 435)
Reserves 1 916 117 1 787 618
Non-controlling interests 13 954 10 744
Total equity 1 727 680 1 595 971
LIABILITIES
Non-current liabilities 655 790 516 367
Borrowings 145 255 14 859
Deferred tax liability 417 646 407 711
Retirement benefit obligations 92 889 93 797
Current liabilities 1 570 864 1 431 208
Trade and other liabilities 1 355 495 1 307 776
Current tax liabilities 2 040 5 684
Borrowings 211 630 116 091
Shareholders for dividend 1 699 1 657
Liabilities held for sale 21 283
Total liabilities 2 226 654 1 968 858
Total equity and liabilities 3 954 334 3 564 829
CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME
Audited Audited
Year ended Year ended
30 Sept 2013 Change 30 Sept 2012
R'000 % R'000
Revenue 8 523 976 4 8 160 078
Operating profit 271 558 (43) 477 149
Profit on sale of interest in business unit 79 426 35 972
Profit before interest and tax 350 984 (32) 513 121
Finance income 937 6 396
Finance costs (27 839) (24 371)
Share of profit from associate 2 800
Profit before tax 326 882 (34) 495 146
Tax expense (79 583) (162 646)
Profit for the year 247 299 (26) 332 500
Other comprehensive income
Foreign currency translation adjustments 12 487 102
Total comprehensive income for the year net of tax 259 786 (22) 332 602
Profit attributable to:
Equity holders of the parent company 244 010 (26) 329 335
Non-controlling interests 3 289 4 3 165
247 299 (26) 332 500
Comprehensive income attributable to:
Equity holders of the parent company 255 920 (22) 329 473
Non-controlling interests 3 866 24 3 129
259 786 (22) 332 602
Earnings per share (cents)
basic 641 (26) 865
diluted 641 (26) 864
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
Audited Audited
Year ended Year ended
30 Sept 2013 30 Sept 2012
R000 R000
Balance beginning of the year 1 595 971 1 585 632
Total comprehensive income for the year 259 786 332 602
Dividends to the companys shareholders (127 882) (320 086)
Payments to non-controlling interest holders (660) (3 829)
Option value of share options granted 465 1 652
Balance at end of the year 1 727 680 1 595 971
CONDENSED GROUP SEGMENTAL ANALYSIS
Audited Audited
Year ended Year ended
30 Sept 2013 Change 30 Sept 2012
R'000 % R'000
Revenue
Poultry 6 000 605 3 5 834 816
As previously reported 5 914 483
Re-allocated to Other Africa (79 667)
Feed 4 915 626 14 4 327 012
As previously reported 4 309 636
Re-allocated from Services and Ventures 17 376
Other Africa 442 146 30 341 308
As previously reported 261 641
Re-allocated from Poultry 79 667
Services and Ventures 30 246 (86) 222 620
As previously reported 239 996
Re-allocated to Feed (17 376)
Sales between segments (2 864 647) (2 565 678)
Feed to Poultry (2 702 755) (2 413 486)
Services and Ventures to Poultry and Feed (161 892) (152 192)
8 523 976 4 8 160 078
Operating profit
Poultry (109 412) (180) 137 438
As previously reported 144 893
Re-allocated to Other Africa (7 455)
Feed 331 276 15 288 808
As previously reported 283 135
Re-allocated from Services and Ventures 5 673
Other Africa 45 021 19 37 677
As previously reported 30 222
Re-allocated from Poultry 7 455
Services and Ventures 4 673 (65) 13 226
As previously reported 18 899
Re-allocated to Feed (5 673)
271 558 (43) 477 149
Capital expenditure
Poultry 59 995 (60) 151 038
As previously reported 152 248
Re-allocated to Other Africa (1 210)
Feed 151 314 352 33 454
As previously reported 31 312
Re-allocated from Services and Ventures 2 142
Other Africa 29 991 34 22 316
As previously reported 21 106
Re-allocated from Poultry 1 210
Services and Ventures (100) 4 519
As previously reported 6 745
Re-allocated to Corporate (84)
Re-allocated to Feed (2 142)
Corporate 106 84
241 406 14 211 411
Depreciation, amortisation and impairment
Poultry 97 628 6 91 816
As previously reported 92 804
Re-allocated to Other Africa (988)
Feed 20 153 9 18 522
As previously reported 17 536
Re-allocated from Services and Ventures 986
Other Africa 8 287 47 5 620
As previously reported 4 632
Re-allocated from Poultry 988
Services and Ventures (100) 6 361
As previously reported 7 711
Re-allocated to Corporate (364)
Re-allocated to Feed (986)
Corporate 358 364
126 426 3 122 683
Assets
Poultry 2 940 901 5 2 797 322
As previously reported 2 830 780
Re-allocated to Other Africa (33 458)
Feed 993 517 19 834 926
As previously reported 825 049
Re-allocated from Services and Ventures 9 877
Other Africa 247 190 48 166 750
As previously reported 133 292
Re-allocated from Poultry 33 458
Services and Ventures
As previously reported 4 949
Re-allocated to Corporate (27 605)
Re-allocated to intra-group 32 533
Re-allocated to Feed (9 877)
Corporate 122 990 27 605
Assets held for sale 51 889
Set-off of intra-group balances (350 264) (313 663)
3 954 334 11 3 564 829
Liabilities
Poultry 1 263 916 6 1 193 892
As previously reported 1 204 362
Re-allocated to Other Africa (10 470)
Feed 888 053 12 794 228
As previously reported 787 266
Re-allocated from Services and Ventures 6 962
Other Africa 103 812 44 71 854
As previously reported 61 384
Re-allocated from Poultry 10 470
Services and Ventures
As previously reported 175 693
Re-allocated to Corporate (201 264)
Re-allocated to intra-group 32 533
Re-allocated to Feed (6 962)
Corporate 321 137 201 264
Liabilities held for sale 21 283
Set-off of intra-group balances (350 264) (313 663)
2 226 654 13 1 968 858
Following changes in internal reporting provided to the chief executive officer, certain comparative amounts have been re-
allocated.
CONDENSED GROUP STATEMENT OF CASH FLOWS
Audited Audited
Year ended Year ended
30 Sept 2013 30 Sept 2012
R'000 R'000
Cash operating profit 388 406 596 964
Changes in working capital (150 736) (118 852)
Cash generated from operations 237 670 478 112
Income tax paid (66 705) (142 072)
Cash generated from operating activities 170 965 336 040
Cash used in investing activities (176 515) (116 583)
Capital expenditure (234 802) (209 274)
Finance income 937 6 396
Proceeds on disposal of business unit/investment held for sale 47 552 83 161
Proceeds on disposal and other 9 798 3 134
Cash flows to financing activities (7 609) (349 848)
Net increase in borrowings 155 334 409
Interest paid (34 443) (26 508)
Dividends paid (128 500) (323 749)
Net movement in cash and cash equivalents (13 159) (130 391)
Effects of exchange rate changes (3 688) (206)
Cash and cash equivalent balances at beginning of the year (61 181) 69 416
Cash and cash equivalent balances at end of the year (78 028) (61 181)
ADDITIONAL INFORMATION
Audited Audited
Year ended Change Year ended
30 Sept 2013 % 30 Sept 2012
Headline earnings (R'000) 168 683 (44) 299 723
Headline earnings per share (cents)
basic 443 (44) 787
diluted 443 (44) 787
Dividend per share (cents)
declared out of earnings for the year 222 (67) 672
Ordinary shares
issued net of treasury shares 38 060 308 38 060 308
weighted-average 38 060 308 38 060 308
diluted weighted-average 38 065 338 38 096 321
Net debt (borrowings less cash and cash equivalents) (R'000) 263 424 105 683
Net asset value per share (Rand) 45,03 8 41,65
NOTES
1. Nature of business
Astral is a leading South African integrated poultry producer. Key activities consist of 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 2013 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 6 November 2013.
3. 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 previous year.
4. 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 2013 30 Sept 2012
R'000 R'000
5. Operating profit
The following items have been accounted for in the operating profit:
Directors' remuneration 23 572 25 150
Biological assets fair value loss 3 116 752
Amortisation of intangible assets 3 305 2 405
Depreciation on property, plant and equipment 119 424 116 296
Impairment of goodwill 3 012
Impairment of property 3 697 970
Profit on sale and scrapping of property, plant and equipment 1 926 885
Profit on sale of unlisted investments 2 485
Foreign exchange loss (146) (1 744)
6. Reconciliation to headline earnings
Earnings for the year 244 010 329 335
Profit on sale and scrapping of property, plant and equipment (net of tax) (2 759) (1 705)
Profit on sale of interest in joint venture/business unit (net of tax) (67 848) (29 646)
Profit on sale of unlisted investments (2 021)
Insurance recovery on damaged assets (net of tax) (6 415) (3 044)
Impairment of goodwill 3 012
Loss on assets scrapped (net of tax) 1 055 1 073
Impairment of property and other assets (net of tax) 2 661 698
Headline earnings for the year 168 683 299 723
Audited Audited
Year ended Year ended
30 Sept 2013 30 Sept 2012
R'000 R'000
7. Borrowings
Non-current
Secured loans 37 229 28 348
Unsecured loans 148 167
Less: Portion payable within 12 months included in current liabilities (40 141) (13 489)
145 255 14 859
Current
Bank overdrafts 171 489 102 602
Portion of non-current loans payable within 12 months 40 141 13 489
211 630 116 091
8. Cash and cash equivalents per cash flow statement
Bank overdrafts (included in current borrowings) (171 489) (102 602)
Cash at bank and in hand 93 461 25 267
Cash and cash equivalents classified as held for sale 16 154
Cash and cash equivalents per cash flow statement (78 028) (61 181)
9. Capital commitments
Capital expenditure approved not contracted 108 270 254 845
Capital expenditure contracted not recognised in financial statements 72 069 17 055
10. Related party transactions with associate/joint venture
Sales 457 263
Purchases 228 412 177 508
Receivables 1 897 2 991
Trade payables 19 923 11 385
FINANCIAL OVERVIEW
Headline earnings for the year decreased by 43,7% to R169 million from last year's R300 million, as a result of losses reported
by the poultry operations.
Increased revenue from all three business segments contributed to the increase in the group's revenue of 4,5% from
R8 160 million to R8 524 million.
The group's profits were severely affected by losses in the poultry segment, whilst both the feed and other Africa segments
reported increased profits. This resulted in the group's operating profit being down by 43,1% to R272 million with the
operating profit margin at 3,2 % down on the previous year's 5,8%. Profit before tax, which includes a profit of R79,4 million
following the sale of 50% of the interest in a joint venture, was down by 34,0% to R327 million.
Net interest paid for the year increased to R27 million from last year's R18 million as a result of increased borrowings following
the poultry losses during the first half of the financial year.
Cash generated from operating activities of R171 million was down on last year's R336 million as result of lower profits and
further increases in working capital. The increased costs of raw material impacted negatively not only on the profitability but
also on the value of working capital at year-end, whilst poultry's finished goods stock levels were higher than the previous
year. Capital expenditure includes costs incurred on the construction of a new feed mill, which is financed from a structured
term loan. The net cash flow, after payment of the final 2012 dividend was an outflow of R13 million, resulting in a net debt
to equity ratio of 15,2%.
The Board considered the possibility of impairments of the poultry cash generating units, in compliance with IAS 36
(Impairments of assets) against the background of the adverse trading conditions experienced during the past year.
Based on discounted cashflow calculations of our latest long-term outlook, there is no need for impairment at this point
in time.
OPERATIONAL OVERVIEW
Poultry division
Revenue for the division increased by 2,8% to R6,0 billion (2012: R5,8 billion) on the back of higher poultry selling prices
(up 8,4%) despite lower volumes (down 5,4%). Profitability decreased significantly to a loss of R109 million (2012: profit of
R137 million). A negative net margin for the division of -1,8% was realised for the reporting period (2012: 2,3%).
The lower profitability is attributable to a 14,1% increase in feed prices, the single biggest input cost, whilst poultry selling
prices only increased by 8,4%. On-farm performances were impacted by higher broiler mortalities, and a slight deterioration
in feed conversion rates, which impacted on the live cost of the birds sent to processing.
The first half of the year was severely impacted by high feed prices, high poultry stock levels in the industry, high levels of
poultry imports and depressed poultry selling prices. It was evident during the reporting period that the poultry industry lacked
pricing power, as can be intimated from the extensive promotional activity that was witnessed in order to manage stock levels
at prices below cost for most of the reporting period.
Amongst numerous cost control measures, Astral implemented a cutback in poultry volumes in order to curb the losses
attributable to the under recovery of input costs in poultry selling prices. The processing yield has increased by over 1% for
the period under review as a result of efforts to improve processing plant efficiencies and product mix.
Feed division
Revenue for the division increased by 13,6% to R4,9 billion (2012: R4,3 billion) as a direct result of the higher raw material
and feed pricing, whilst sales volumes increased marginally (up 1,0%). Meadow Feeds supplies 49% of its total volumes to
the Group's downstream poultry operations, contributing significantly to cost recovery in the feed division. Total volumes
remained unchanged year-on-year at approximately 1,2 million tons per annum, with a marginal increase of 1% driven by an
increase in feed sales to the external market of 4% offset by a drop in feed supply volumes to Astral's poultry operations of 3%.
Operating profit increased by 14,7% to R331 million (2012: R289 million) with an operating profit margin unchanged at 6,7%.
This division posted a good performance and successfully recovered inflationary costs from the market, whilst maintaining an
acceptable level of credit risk without sacrificing sales volumes.
Other Africa division
Revenue for the division increased by 29,5% to R442 million (2012: R341 million) as a result of higher volumes (up 14,2%).
The operating profit increased by 19,5% to R45 million (2012: R38 million) with an operating profit margin of 10,2% (2012:
11,0%). A good performance from this division was supported by the results in the broiler breeder and hatchery operations
in Zambia, Mozambique and Swaziland, with the animal feed operation in Zambia reporting an admirable growth in earnings.
Services and Ventures division
Revenue for the division decreased to R30 million (2012: R223 million). Profitability decreased to R4,7 million (2012:
R13,2 million). Excluded from the results for the period under review is the profit contribution from the East Balt SA operation,
which was disposed of during 2012 and in addition only includes two months' reporting pre-disposal of half of the Group's
50% interest in Nutec. Future segmental reporting for this division will fall away.
LABOUR MATTERS
Industrial action experienced at the Group's Earlybird Olifantsfontein processing operation in Gauteng and the County Fair
poultry farms in the Western Cape, resulted in a direct cost for the period under review of R37 million.
The Group has successfully concluded all current annual wage negotiations during the latter half of the reporting period, of
which some agreements are for a two to three year period.
COMPETITION COMMISSION
As previously reported an all-inclusive agreement with the Competition Commission has been negotiated and concluded to
settle all previous matters and investigations. This agreement has, in principle, been confirmed as an order by the Competition
Tribunal. A settlement value of R17 million was fully provided for in the prior financial year.
Astral recently received notice from the Competition Commission that a complaint has been lodged by the Association of
Meat Importers and Exporters against various players in the poultry industry, to the effect that there has been a tacit co-
ordinated approach where industry players are inflating feed prices and brining chicken products at similar levels. It has been
alleged that these practices have been used in order for the industry to prove material damage in their recent poultry import
tariff applications. Astral is cooperating with the Competition Commission in this regard, and will complete a submission as
required.
PROSPECTS
The recently approved increase in the General Rate of Duty on poultry imports will go some way in levelling the playing field
on a cost basis. An anti-dumping application against the EU, if successful, will improve the imbalance in supply and demand,
which could provide the industry a better opportunity to recover escalating input costs.
Projected lower feed costs in 1H2014 over the comparative period, together with the commissioning of the new Standerton
feed mill during the latter half of F2014, will benefit downstream poultry production costs.
Although the tough trading environment is not expected to ease in the new financial period, there are a number of positives
impacting our results.
DECLARATION OF ORDINARY DIVIDEND No. 25
The board has approved a final dividend of 222 cents per ordinary share (gross) in respect of the year ended 30 September
2013.
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 per centum);
There are no Secondary Tax on Companies (STC) credits utilised;
The gross local dividend is 222 cents per ordinary share for shareholders exempt from the Dividend Tax;
The net local dividend is 188,7 cent 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, 17 January 2014
Shares commence trading ex-dividend Monday, 20 January 2014
Record date Friday, 24 January 2014
Payment of dividend Monday, 27 January 2014
Share certificates may not be dematerialised or rematerialised between Monday, 20 January 2014 and Friday, 24 January
2014, both days inclusive.
On behalf of the board
JJ Geldenhuys CE Schutte
Chairman Chief Executive Officer
Pretoria
6 November 2013
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, T Eloff
*DD Ferreira (Financial Director), IS Fourie, *OM Lukhele, M Macdonald, TM Maumela, TM Shabangu, N Tsengwa,
(*Executive director)
Company secretary
MA Eloff
Transfer secretaries
Computershare Investor Services (Pty) Limited
70 Marshall Street, Johannesburg, 2001, 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
contact Maryna Eloff at the registered office or at maryna.eloff@astralfoods.com
Date: 11/11/2013 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 
