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Audited summary results and dividend declaration
Astral Foods Limited
Incorporated in the Republic of South Africa
Registration number 1978/003194/06
Share code: ARL ISIN: ZAE000029757
AUDITED SUMMARY CONSOLIDATED
RESULTS
AND DIVIDEND DECLARATION
30 September 2015
up 17% REVENUE INCREASE
up 123% OPERATING PROFIT INCREASE
up 133% HEADLINE EARNINGS PER SHARE INCREASE
up 575c FINAL DIVIDEND PER SHARE
SUMMARY CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Audited Audited
12 months 12 months
ended ended
30 Sept 2015 30 Sept 2014
R'000 R'000
ASSETS
Non-current assets 2 233 413 2 241 407
Property, plant and equipment 2 054 677 2 059 143
Intangible assets 14 389 18 601
Goodwill 136 135 136 135
Investment in associates 25 468 22 180
Investments 2 744 3 453
Deferred tax asset – 1 895
Current assets 2 580 391 2 133 628
Inventories 702 340 452 594
Biological assets 667 540 644 590
Trade and other receivables 882 310 893 024
Current tax asset 9 052 12 889
Cash and cash equivalents 319 149 130 531
Total assets 4 813 804 4 375 035
EQUITY
Capital and reserves attributable to equity holders
of the parent company 2 360 866 1 929 672
Issued capital 72 357 67 875
Treasury shares (204 435) (204 435)
Reserves 2 492 944 2 066 232
Non-controlling interests 10 714 15 168
Total equity 2 371 580 1 944 840
LIABILITIES
Non-current liabilities 616 396 730 818
Borrowings (note 7) 34 501 156 000
Deferred tax liabilities 420 192 438 035
Employment benefit obligations 161 703 136 783
Current liabilities 1 825 828 1 699 377
Trade and other liabilities 1 480 309 1 527 007
Current tax liabilities 2 290 22 409
Borrowings (note 7) 341 482 148 287
Shareholders for dividend 1 747 1 674
Total liabilities 2 442 224 2 430 195
Total equity and liabilities 4 813 804 4 375 035
SUMMARY CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Audited Audited
12 months 12 months
ended ended
30 Sept 2015 30 Sept 2014 Change
R'000 R'000 %
Revenue 11 265 962 9 602 376 17
Profit before interest and tax (note 5) 1 100 484 492 939 123
Finance income 12 810 651
Finance costs (22 988) (25 929)
Share of profit from associate 3 288 2 240
Profit before income tax 1 093 594 469 901 133
Tax expense (313 655) (128 835)
Profit for the year 779 939 341 066 129
Other comprehensive income
Remeasurement of post-employment benefit obligations
(net of deferred tax) 791 4 281
Change in the value of available-for-sale financial assets (709) 1 367
Foreign currency loss on investment loans to
foreign subsidiaries (2 905) (859)
Foreign currency translation adjustments (34 398) 1 113
Total comprehensive income for the year 742 718 346 968 114
Profit attributable to:
Equity holders of the holding company 778 126 337 518 131
Non-controlling interests 1 813 3 548 (49)
779 939 341 066 129
Comprehensive income attributable to:
Equity holders of the holding company 741 612 343 128 116
Non-controlling interests 1 106 3 840 (71)
742 718 346 968 114
Earnings per share (cents)
– basic 2 013 884 128
– diluted 2 009 884 127
SUMMARY CONSOLIDATED STATEMENT OF CASH FLOWS
Audited Audited
12 months 12 months
ended ended
30 Sept 2015 30 Sept 2014
R'000 R'000
Cash operating profit 1 436 184 671 225
Changes in working capital (440 638) 32 897
Cash generated from operating activities 995 546 704 122
Income tax paid (344 325) (100 232)
Cash flows from operating activities 651 221 603 890
Cash used in investing activities (185 821) (382 645)
Capital expenditure (202 819) (394 982)
Finance income 12 810 651
Repayment of loan – 3 262
Proceeds on disposal of property, plant and equipment 4 188 8 424
Cash flows from financing activities (458 321) (110 822)
Net (decrease)/increase in borrowings (119 889) 24 099
Proceeds from shares issued 4 482 65 831
Interest paid (22 268) (37 495)
Dividends paid (320 646) (163 257)
Net movement in cash and cash equivalents 7 079 110 423
Effects of exchange rate changes (12 885) (4)
Cash and cash equivalent balances at beginning of year 32 391 (78 028)
Cash and cash equivalent balances at end of year (note 8) 26 585 32 391
SUMMARY CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Audited Audited
12 months 12 months
ended ended
30 Sept 2015 30 Sept 2014
R'000 R'000
Balance beginning of year 1 944 840 1 694 820
Total comprehensive income for the period 742 718 346 968
Dividends to the company's shareholders (315 159) (160 615)
Payments to non-controlling interest holders (5 560) (2 617)
Proceeds on shares issued 4 482 65 831
Option value of share options granted 259 453
Balance at end of period 2 371 580 1 944 840
ADDITIONAL INFORMATION
Audited Audited
12 months 12 months
ended ended Change
30 Sept 2015 30 Sept 2014 %
Headline earnings (R'000) – (note 6) 779 649 329 740 136
Headline earnings per share (cents)
– basic 2 016 864 133
– diluted 2 013 864 133
Dividends per share (cents) – declared out of earnings
for the year
– Final dividend for the year 575 240 140
– Total dividend for the year 1 150 440 161
Number of ordinary shares
– Issued net of treasury shares 38 672 708 38 634 108
– Weighted-average 38 663 740 38 171 021
– Diluted weighted average 38 734 021 38 176 737
Net debt (borrowings less cash and cash equivalents) (R'000) 56 834 173 756
Net debt to equity percentage 2,4 8,9
Net asset value per share (Rand) 61,05 49,95
SUMMARY CONSOLIDATED SEGMENTAL ANALYSIS
Audited Audited
12 months 12 months
ended ended
30 Sept 2015 30 Sept 2014 Change
R'000 R'000 %
Revenue
Poultry 8 739 488 6 966 716 25
Feed 6 235 955 5 506 079 13
Other Africa 493 508 499 278 (1)
Inter-group (4 202 989) (3 369 697)
Feed to poultry (3 996 814) (3 201 796)
Other (206 175) (167 901)
11 265 962 9 602 376 17
Operating profit
Poultry 661 002 104 400 533
Feed 422 885 353 728 20
Other Africa 16 597 34 811 (52)
1 100 484 492 939 123
Capital expenditure
Poultry 147 293 286 329 (49)
Feed 36 745 98 732 (63)
Other Africa 5 140 19 020 (73)
Corporate office 191 135
189 369 404 216 (53)
Depreciation, amortisation and impairment
Poultry 113 823 105 211 8
Feed 28 980 17 847 62
Other Africa 10 288 11 080 (7)
Corporate office 232 354
153 323 134 492 14
Total assets
Poultry 3 376 553 3 137 235 8
Feed 1 683 422 1 533 958 10
Other Africa 211 539 253 104 (16)
Corporate office 342 212 150 309 128
Set-off of intra-group balances (799 922) (699 571)
4 813 804 4 375 035 10
Total liabilities
Poultry 1 882 581 1 630 061 15
Feed 821 385 1 048 002 (22)
Other Africa 96 880 94 917 2
Corporate office 441 300 356 786 24
Set-off of intra-group balances (799 922) (699 571)
2 442 224 2 430 195 –
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 summary consolidated financial statements are prepared in accordance with the requirements of the JSE Limited
Listings Requirements for preliminary reports, and the requirements of the Companies Act applicable to summary financial
statements. The Listings Requirements require preliminary reports to be prepared in accordance with the framework
concepts and the measurement and recognition requirements of International Financial Reporting Standards (IFRS) and
the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements
as issued by the Financial Reporting Standards Council and to also, as a minimum, contain the information required by
IAS 34: Interim Financial Reporting.
The financial statements have been prepared by the chief financial officer, DD Ferreira CA(SA), and were approved by the
board on 11 November 2015.
3. Accounting policies
The accounting policies applied in these summary consolidated 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 2014.
4. Independent audit by the auditors
These summary consolidated financial statements for the year ended 30 September 2015 have been audited by
PricewaterhouseCoopers Inc., who expressed an unmodified opinion thereon. The auditor also expressed an unmodified
opinion on the annual financial statements from which these summary consolidated financial statements were derived.
A copy of the auditor's report on the summary consolidated financial statements and of the auditor's report on the
annual consolidated financial statements are available for inspection at the company's registered office, together with
the financial statements identified in the respective auditor's reports.
The auditor's report does not necessarily report on all of the information contained in this announcement/financial results.
Shareholders are therefore advised that in order to obtain a full understanding of the nature of the auditor's engagement
they should obtain a copy of the auditor's report together with the accompanying financial information from the issuer's
registered office.
Audited Audited
12 months 12 months
ended ended
30 Sept 2015 30 Sept 2014
R'000 R'000
5. Operating profit
The following items have been accounted for in the operating profit:
Directors' remuneration 53 102 30 555
Biological assets – fair value gain 9 049 2 725
Amortisation of intangible assets 5 353 9 848
Depreciation on property, plant and equipment 147 803 124 797
Profit on sale of property, plant and equipment 1 593 5 225
Assets scrapped 4 046 8 585
Foreign exchange (losses)/profits (10 327) 1 109
Reversal of impairment charge on property, plant and equipment – 153
Insurance recoveries 2 991 15 977
6. Reconciliation to headline earnings
Net profit attributable to shareholders 778 126 337 518
Profit on sale of property, plant and equipment (net of tax) (1 399) (3 981)
Loss on assets scrapped (net of tax) 2 922 6 157
Insurance recovery on damaged assets (net of tax) – (6 441)
Reversal of impairment charge on property, plant and equipment
(net of tax) – (110)
Adjustment to prior year tax provision on sale of investment – (3 403)
Headline earnings for the period 779 649 329 740
7. Borrowings
Non-current
Secured loans 3 642 16 945
Unsecured loan 79 777 189 202
Less: Portion payable within 12 months included in current liabilities (48 918) (50 147)
34 501 156 000
Current
Bank overdrafts 292 564 98 140
Portion of non-current secured loans payable within 12 months 48 918 50 147
341 482 148 287
8. Cash and cash equivalents per cash flow statement
Bank overdrafts (included in current borrowings) (292 564) (98 140)
Cash at bank and in hand 319 149 130 531
Cash and cash equivalents per cash flow statement 26 585 32 391
9. Capital commitments
Capital expenditure approved not contracted 43 497 12 956
Capital expenditure contracted not recognised in financial statements 23 415 43 521
10. Related party transactions – with associate
Sales 7 543 7 874
Purchases 227 846 206 357
Receivables 3 521 6 395
Trade payables 23 218 25 508
FINANCIAL OVERVIEW
The increase in headline earnings from R329,7 million for the previous year, to R779,6 million for
the 2015 financial year, is mainly attributable to a material improvement in poultry's profits which
was well supported by increased profits from the feed segment.
Revenue increased by 17,3% to R11 266 million, mainly driven by a 25,4% increase in poultry revenue.
The group's operating profit increased by 123,2% to a record R1 100,5 million. The Poultry division's
reported operating profit of R661,0 million, compared to the profit of R104,4 million for the previous
year, is the main driver for the improvement in the group's operating profit. Profitability of the Feed
division at R422,9 million represents an increase of 19,6% on the previous year's operating profit.
The Africa division's operating profit at R16,6 million is down on the previous year's R34,8 million,
impacted by the weakening in the functional currencies of those other African countries, resulting in
difficult trading conditions.
Net finance cost at R10,2 million was lower than the previous year's R25,3 million. Cash flow for the
year has been positive, allowing for an accelerated payment on the long-term loan incurred to finance
the construction of the new Standerton feedmill.
Profit before tax at R1 093,6 million is 132,7% higher than the previous year's R469,9 million.
The cash generated from operating activities at R995,5 million represents a 41,4% increase on
the previous year's R704,1 million, inspite of an outflow of R440,6 million for the increased level of
working capital. Stock levels for both poultry products and feed stock were abnormally high at year-
end compared to the previous reporting period. The payment terms of certain raw material creditors
were also brought forward with one day to 30 September, in order to better align the cash outflow for
payment of these trade payables with the cash inflow from trade receivables received on or before
year-end reporting date. Capital expenditure at R202,8 million reflects normal ongoing expenditure,
compared to the previous year which includes expenditure on specific major capital projects. The net
movement in cash and cash equivalents was an inflow of R7,1 million for the year. The net debt equity
ratio, including the funding of the new feed mill, at 2,4% is down from 8,9% as at 30 September 2014.
The board has declared a final dividend of 575 cents per share. The distribution is supported by the low
debt to equity level and the underlying liquidity capabilities of the group.
OPERATIONAL OVERVIEW
Poultry division
Revenue for the division was up by 25,4% to R8 739 million (2014: R6 967 million) supported
by higher broiler volumes which increased by 12,8%. This increase was primarily due to the
contribution to sales as a result of the Quantum broiler volumes (550 000 birds per week) now
incorporated into Astral's Western Cape broiler operation. Improved farm production efficiencies
and increased bird placements, against cutbacks in the comparable reporting period, added
further volumes during the period under review.
The average selling price of poultry increased by 11,9% for the period under review, tracking food
price inflation over the past year and reflects an element of recovery in poultry selling prices that
was eroded in prior years. Improved production costs as a result of feed prices decreasing by
2,5% over the comparable period, coupled with the abovementioned volume increase, resulted in
the operating profit for the division increasing to R661 million (2014: R104 million). The operating
profit margin improved to a more normalised 7,6% for the period under review (2014: 1,5%).
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 these volumes in the Western Cape
through the take-on of the Quantum volumes.
Notwithstanding the permanent EU anti-dumping duties imposed on Germany, Netherlands
and the United Kingdom, poultry imports remained high during the period, with a record level
of total poultry product imports equating to approximately 8,6 million birds per week for the
month of July 2015. Imports from the EU have switched to other countries in that region, and
notwithstanding the weak South African currency, the high level of imports is clear proof that
classic dumping is still taking place.
Feed division
Revenue for the division increased by 13,3% to R6 236 million (2014: R5 506 million) as a result of
higher sales volumes which increased by 12,4% year-on-year due to the contribution of volumes
previously supplied by Afgri Kinross now manufactured in the new Standerton feed mill.
The Standerton feed mill produced on average 24 000 tons of poultry feed per month for the
period under review (capacity utilisation of 60%), and together with operational efficiencies
derived from the new plant contributed positively to the feed division.
The operating profit improved to R423 million (2014: R354 million) with an operating profit margin
at 6,8% (2014: 6,4%). Rand per ton margins improved year-on-year, supported by the successful
recovery of inflationary costs and margin improvement through cost benefits attributable to the
new Standerton feed mill.
Other Africa division
Revenue for the division decreased marginally by 1,2% to R494 million (2014: R499 million)
impacted by lower feed and day-old chick volumes sold in Mozambique over the comparable
period.
Operating profit decreased to R17 million (2014: R35 million). For the period under review the
profitability at both the Zambian and Mozambican feed operations was severely impacted by
currency exchange movements increasing raw material input costs, and exposing the Zambian
feed business to foreign exchange rate losses on USD-based creditor payments.
PROSPECTS
The slowing level of growth in the economy, higher unemployment levels and higher inflation
rates, will continue to hamper an increase in the per capita consumption of poultry.
The strong El Niño effect and its impact on planting conditions will negatively impact crop yields
leading to higher feed prices in the new reporting period.
There is a strong likelihood that brining regulations will be introduced in the foreseeable future,
which could result in lower volumes for the industry, and higher selling prices for the consumer.
These regulations if promulgated at the proposed levels by the Department of Agriculture, Forestry
and Fisheries (DAFF), as well as the technical format of the regulations, will likely be challenged by the
industry.
The annual quota for 65 000 tons of US poultry, free of anti-dumping duties negotiated around
the renewal of the African Growth and Opportunity Act (AGOA) is likely to negatively impact local
producers as high levels of poultry imports continue unabated.
Further consolidation in the industry could follow as a result of the above as the resilience of the
poultry industry will be tested to the limit. Astral's best cost integrated strategy has strengthened
over the past year on the back of selective investments which have contributed to higher poultry
volumes, improved efficiencies and feeding costs into the future.
DECLARATION OF ORDINARY DIVIDEND No. 29
The board has approved a final dividend of 575 cents per ordinary share (gross) in respect of the
year ended 30 September 2015.
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);
– 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 42 761 285 ordinary shares in issue (which includes 4 088 577
treasury shares held by a subsidiary); and
– Astral Foods Limited's income tax reference number is 9125190711.
Shareholders are advised of the following dates in respect of the interim dividend:
– Last date to trade cum-dividend Friday, 15 January 2016
– Shares commence trading ex-dividend Monday,18 January 2016
– Record date Friday, 22 January 2016
– Payment of dividend Monday, 25 January 2016
Share certificates may not be dematerialised or rematerialised between Monday, 18 January 2016
and Friday, 22 January 2016, both days inclusive.
On behalf of the board
T Eloff CE Schutte
Chairman Chief Executive Officer
Pretoria
11 November 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,
TP Maumela, TM Shabangu, Dr 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 Equities South Africa (Pty) Limited, 1 Fricker Road, Illovo, Johannesburg. 2146, Private Bag X9936,
Sandton, 2146, Telephone: +27 (0)11 507 0430
www.astralfoods.com
Release date: 16 November 2015
Date: 16/11/2015 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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