Wrap Text
Unaudited interim results
for the six months ended 31 March 2015
Astral Foods Limited
Incorporated in the Republic of South Africa
Registration no 1978/003194/06
Share code ARL ISIN ZAE000029757
UNAUDITED INTERIM RESULTS
for the six months ended 31 March 2015
22%
REVENUE INCREASE
158%
OPERATING PROFIT INCREASE
166%
EARNINGS PER SHARE INCREASE
159%
HEADLINE EARNINGS
PER SHARE INCREASE
188%
INTERIM DIVIDEND 575 CENTS
PER SHARE
CONDENSED GROUP STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 March 31 March 30 Sept
2015 2014 2014
R'000 R'000 R'000
ASSETS
Non-current assets 2 203 142 2 060 066 2 241 407
Property, plant and equipment 2 022 920 1 874 812 2 059 143
Intangible assets 16 188 21 434 18 601
Goodwill 136 135 136 135 136 135
Investment in associates 24 447 22 337 22 180
Investments and loans 3 452 5 348 3 453
Deferred tax asset 1 895
Current assets 2 683 953 2 036 719 2 133 628
Inventories 419 277 523 969 452 594
Biological assets 594 857 616 480 644 590
Trade and other receivables 991 363 853 014 893 024
Current tax asset – 2 480 12 889
Cash and cash equivalents 678 456 40 776 130 531
Total assets 4 887 095 4 096 785 4 375 035
Equity
Capital and reserves attributable to equity
holders of the parent company 2 210 636 1 733 999 1 929 672
Issued capital 72 159 2 044 67 875
Treasury shares (204 435) (204 435) (204 435)
Reserves 2 342 912 1 936 390 2 066 232
Non-controlling interest 15 516 14 949 15 168
Total equity 2 226 152 1 748 948 1 944 840
Liabilities
Non-current liabilities 692 607 700 778 730 818
Borrowings (note 6) 134 740 180 464 156 000
Deferred tax liability 417 152 423 515 438 035
Employment benefit obligations 140 715 96 799 136 783
Current liabilities 1 968 336 1 647 059 1 699 377
Trade and other liabilities 1 622 142 1 566 748 1 527 007
Current tax liabilities 41 286 – 22 409
Borrowings (note 6) 303 247 78 570 148 287
Shareholders for dividend 1 661 1 741 1 674
Total liabilities 2 660 943 2 347 837 2 430 195
Total equity and liabilities 4 887 095 4 096 785 4 375 035
CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 March 31 March 30 Sept
2015 2014 2014
R'000 R'000 % change R'000
Revenue 5 754 605 4 699 938 22 9 602 376
Operating profit (note 4) 550 161 212 950 158 492 939
Finance income 2 852 71 651
Finance costs (12 944) (11 891) (25 929)
Share of profit from associate 2 267 2 397 2 240
Profit before income tax 542 336 203 527 166 469 901
Tax expense (154 351) (58 230) (128 835)
Profit for the period 387 985 145 297 167 341 066
Other comprehensive income
Remeasurement of post-
employment benefit obligations
(net of deferred tax) 4 281
Change in the value of available-
for-sale financial assets 1 367
Foreign currency loss on
investment loans to foreign
subsidiaries (859)
Foreign currency translation
adjustments (18 118) (6 052) 1 113
Total comprehensive income
for the period 369 867 139 245 166 346 968
Profit attributable to:
Equity holders of the holding
company 386 353 143 214 170 337 518
Non-controlling interests 1 632 2 083 3 548
387 985 145 297 167 341 066
Comprehensive income
attributable to:
Equity holders of the holding
company 369 199 137 259 169 343 128
Non-controlling interests 668 1 986 3 840
369 867 139 245 166 346 968
Earnings per share (cents)
– basic 999 376 166 884
– diluted 997 376 165 884
CONDENSED GROUP STATEMENT OF CASH FLOWS
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 March 31 March 30 Sept
2015 2014 2014
R'000 R'000 R'000
Cash operating profit 628 520 287 474 671 225
Changes in working capital 79 846 57 984 32 897
Cash generated from operating activities 708 366 345 458 704 122
Income tax paid (142 210) (52 128) (100 232)
Cash flows from operating activities 566 156 293 330 603 890
Cash used in investing activities (46 527) (148 186) (382 645)
Capital expenditure (49 820) (149 513) (394 982)
Finance income 2 852 71 651
Decrease in loans 3 262
Proceeds on disposal of property,
plant and equipment 441 1 256 8 424
Cash flows to financing activities (125 919) (55 032) (110 822)
Net (decrease)/increase in borrowings (23 382) 49 077 24 099
Proceeds from shares issued 4 284 65 831
Interest paid (13 697) (18 667) (37 495)
Dividends paid (93 124) (85 442) (163 257)
Net movement in cash and cash equivalents 393 710 90 112 110 423
Effects of exchange rate changes (2 867) 4 131 (4)
Cash and cash equivalent balances
at beginning of year 32 391 (78 028) (78 028)
Cash and cash equivalent balances
at end of period (note 7) 423 234 16 215 32 391
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 March 31 March 30 Sept
2015 2014 2014
R'000 R'000 R'000
Balance beginning of year 1 944 840 1 694 820 1 694 820
Total comprehensive income for the period 369 867 139 245 346 968
Dividends to the company's shareholders (92 804) (84 494) (160 615)
Payments to non-controlling interest holders (320) (990) (2 617)
Proceeds on shares issued 4 284 65 831
Option value of share options granted 285 367 453
Balance at end of period 2 226 152 1 748 948 1 944 840
CONDENSED GROUP SEGMENTAL ANALYSIS
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 March 31 March 30 Sept
2015 2014 2014
R'000 R'000 % change R'000
Revenue
Poultry 4 502 695 3 316 919 36 6 966 716
Feed 2 960 583 2 550 501 16 5 506 079
Other Africa 256 251 248 263 3 499 278
Inter-group (1 964 924) (1 415 745) (3 369 697)
5 754 605 4 699 938 22 9 602 376
Operating profit
Poultry 350 903 44 944 681 104 400
Feed 185 726 157 059 18 353 728
Other Africa 13 531 10 947 24 34 811
550 160 212 950 158 492 939
ADDITIONAL INFORMATION
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 March 31 March 30 Sept
2015 2014 % change 2014
Headline earnings (R'000) – (note 5) 386 999 146 841 164 329 740
Headline earnings per share (cents)
– basic 1 001 386 159 864
– diluted 999 386 159 864
Dividends per share (cents) 575 200 188 440
Number of ordinary shares
– Issued net of treasury shares 38 670 408 38 060 308 38 634 108
– Weighted-average 38 663 233 38 060 308 38 171 021
– Diluted weighted-average 38 751 439 38 064 308 38 176 737
Net surplus cash/(debt) – cash and cash
equivalents less borrowings (R'000) 240 469 (218 258) (173 756)
Net debt to equity percentage (%) – 12,5 8,9
Net asset value per share (Rand) 57,17 45,56 49,95
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 sale and
distribution of various key poultry brands.
2. Basis of preparation
The condensed interim financial statements for the six months ended 31 March 2015 have been
prepared in accordance with International Reporting Standards ("IFRS"), IAS 34 – Interim
Financial Reporting, the Listings Requirements of the JSE Limited and the South African
Companies Act (2008). These condensed interim financial statements have been prepared under
the supervision of the financial director, DD Ferreira CA(SA).
These financial statements have not been reviewed or audited by the Group's auditors.
3. Accounting policies
The accounting policies applied in this interim financial statements comply with IFRS and
is consistent with those applied in the preparation of the Group's annual financial
statements for the year ended 30 September 2014.
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 March 31 March 30 Sept
2015 2014 2014
R'000 R'000 R'000
4. Operating profit
The following items have been accounted for in
the operating profit:
Amortisation of intangible assets 2 579 4 531 9 848
Depreciation on property, plant and equipment 70 467 60 677 124 797
(Loss)/profit on sale of property, plant and
equipment (895) (787) 5 225
Foreign exchange profits/(losses) 6 202 445 1 109
Impairment/(Reversal) of property,
plant and equipment 2 251 (153)
Directors remuneration 30 555
Biological assets – fair value gain 2 725
Assets scrapped 8 585
Insurance recoveries 15 977
5. Reconciliation to headline earnings
Net profit attributable to shareholders 386 353 143 214 337 518
Loss/(profit) on sale of property,
plant and equipment (net of tax) 646 566 (3 981)
Loss on assets scrapped (net of tax) 1 440 6 157
(Reversal of impairment)/impairment charge on
property, plant and equipment (net of tax) 1 621 (110)
Insurance recovery on damaged assets
(net of tax) (6 441)
Adjustment to prior tax provision on sale of
investment (3 403)
Headline earnings for the period 386 999 146 841 329 740
6. Borrowings
Non-current
Secured loans 10 176 26 517 16 945
Unsecured loans 172 589 207 956 189 202
Less: Portion payable within 12 months included in
current liabilities (48 025) (54 009) (50 147)
134 740 180 464 156 000
Current
Bank overdrafts 255 222 24 561 98 140
Portion of non-current secured loans payable within
12 months 48 025 54 009 50 147
303 247 78 570 148 287
7. Cash and cash equivalents
per cash flow statement
Bank overdrafts (included in current borrowings) (255 222) (24 561) (98 140)
Cash at bank and in hand 678 456 40 776 130 531
Cash and cash equivalents per cash flow
statement 423 234 16 215 32 391
8. Capital commitments
Capital expenditure approved not contracted 51 180 133 898 12 956
Capital expenditure contracted not recognised in
financial statements 31 435 135 686 43 521
FINANCIAL OVERVIEW
The increase in headline earnings from R147 million for the previous year's first six months,
to R387 million for the first six months of the 2015 financial year, is mainly attributable to
normalised profit margins achieved by the poultry division and from increased broiler sales
volumes.
Revenue increased by 22,4% to R5 755 million, mostly contributed by the increased poultry
sales.
The group's operating profit increased by 158,4% to R550 million. The poultry division's
contribution of R351 million, is a significant increase on its previous year's reported
operating profit of R45 million. Profitability of the feed division, which now includes
contributions from the recently commissioned Standerton feedmill, is at R186 million,
18,3% higher than the profit for the comparative period. The Africa division's profit
is at R14 million, 23,6% better than the previous year, however the contribution towards
the group's profit remain relatively small.
The net finance cost at R10 million is lower than the previous year, as result of the cash
inflow during the reporting period.
Cash inflow from operating activities at R566 million is well up on the previous year's
inflow of R293 million. Capital expenditure of R50 million reflects expenditure on normal
replacement items. The net movement in cash and cash equivalents, including the payment
of the 2014 final dividend, was an inflow of R394 million. The group reported a net cash
surplus of R240 million which includes the long-term funding of the new feed mill, compared
to the net debt position of R174 million as at 30 September 2014.
The Board has declared an interim dividend of 575 cents per share. The distribution is
supported by available surplus funds and the underlying liquidity capabilities of the group.
OPERATIONAL OVERVIEW
Poultry division
Revenue for the division was up by 35,7% to R4 503 million (2014: R3 317 million) supported
by higher broiler volumes which improved by 19,9% and is primarily due to the contribution
to sales as a result of the Tydstroom broiler volumes now incorporated into Astral's Western
Cape broiler operation. An additional volume benefit was also realised from both on-farm
production efficiencies and increased bird placements against cutbacks in the comparable
reporting period.
The average selling price of poultry increased by 12,8% for the period under review and
together with improved production costs as a result feed prices decreasing by 2,3% versus
the comparable period, and the abovementioned volume increase resulted in the operating
profit for the division increasing to R351 million (2014: R45 million).
The improved average selling price includes a contribution from product mix with an
increase in the fresh participation of 2% driven largely by the increase in fresh
volumes in the Western Cape through the take on of the Tydstroom volumes.
Notwithstanding the provisional and permanent EU anti-dumping duties poultry imports
remained high during the period, with an average level of total poultry product
imports equating to approximately 6,2 million birds per week for the six months
ending March 2015.
Feed division
Revenue for the division increased by 16,1% to R2 961 million (2014: R2 550 million) as a
result of higher sales volumes which increased by 17,2% over the comparable period due to
the contribution of volumes previously supplied by Afgri Kinross now manufactured in the
new Standerton feed mill.
Operating profit improved to R186 million (2014: R157 million) with an operating profit
margin at 6,3%. Rand per ton margins were maintained on the comparable period in the
prior year, supported by the successful recovery of inflationary costs.
Other Africa division
Revenue for the division increased by 3,2% to R256 million (2014: R248 million) as a
result of higher day old chick sales over the comparable period with the completion
of the expansion projects in Zambia and Mozambique.
The operating profit increased to R14 million (2014: R11 million). For the period
under review the profitability at both the Zambian and Mozambican feed operations was
negatively impacted by currency exchange movements increasing raw material input costs.
PROSPECTS
The slowing level of growth in the economy and higher unemployment levels will continue
to hamper an increase in the per capita consumption of poultry.
If a quota on US poultry imports is agreed to on the back of the AGOA renewal this is likely
to negatively impact local producers due to additional volumes of poultry products in the
local market.
The South African maize crop currently being harvested is estimated to be the lowest maize
crop since 2007, which will negatively impact livestock production costs due to higher feed
prices in the second half of the current reporting period and to the onset of the new maize
crop in 2016.
The increasing maize prices will be partly offset by more favourable soya prices as these
two raw materials contribute the majority of the ingredients in a typical poultry feed
ration. Global stock levels of both maize and soya remain healthy and could support the
option of grain imports into Astral's coastal feed mills.
Astral's best cost integrated strategy again proved to be robust and has further
strengthened on the back of selective investments contributing to higher poultry volumes,
improved efficiencies and feeding costs into the future.
DECLARATION OF ORDINARY DIVIDEND No 28
The Board has approved an interim dividend of 575 cents per ordinary share (gross) in
respect of the six months ended 31 March 2015.
The dividend will be subject to Dividend 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);
– The gross local dividend is 575 cents per ordinary share for shareholders exempt from
the Dividend Tax;
– The net local dividend is 488,75 cents per ordinary share for shareholders liable to pay
Dividend Tax;
– Astral Foods Limited has currently 42 758 985 ordinary shares in issue (which includes
4 088 577 treasury shares held by a subsidiary), and Astral Foods Limited's income tax; and
– Reference number is 9125190711.
Shareholders are advised of the following dates in respect of the interim dividend:
– Last date to trade cum-dividend Friday, 5 June 2015
– Shares commence trading ex-dividend Monday, 8 June 2015
– Record date Friday, 12 June 2015
– Payment of dividend Monday, 15 June 2015
Share certificates may not be dematerialised or rematerialised between Monday,
8 June 2015 and Friday, 12 June 2015, both days inclusive.
On behalf of the board
Dr T Eloff CE Schutte
Chairman Chief Executive Officer
Pretoria
18 May 2015
Registered office 92 Koranna Avenue, Doringkloof, Centurion, 0157 South Africa
Postnet Suite 278, Private Bag X1028, Doringkloof, 0140
Telephone: +27 (0)12 667 5468
Directors Dr T Eloff (Chairman), *CE Schutte (Chief Executive Officer), *GD Arnold,
*T Delport, *DD Ferreira (Chief Financial Officer), IS Fourie, *Dr OM Lukhele,
M Macdonald, TM Shabangu, TP Maumela, Dr N Tsengwa (*Executive Director)
Company secretary MA Eloff
Transfer secretaries Computershare Investor Services (Pty) Ltd
70 Marshall Street, Johannesburg, 2001
PO Box 61051, Marshalltown, 2107
Telephone: +27 (0)11 370 5000
Sponsor JPMorgan Equities South Africa (Pty) Ltd
1 Fricker Road, Illovo, Johannesburg, 2196
Private Bag X9936, Sandton, 2146
Telephone: +27 (0)11 507 0430
www.astralfoods.com
Date: 18/05/2015 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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