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Trading Statement
QUANTUM FOODS HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Registration Number: 2013/208598/06
Share Code: QFH
ISIN Code: ZAE000193686
("Quantum Foods" or "the Company")
TRADING STATEMENT
In terms of the Listings Requirements of the JSE Limited, a listed company is required
to issue a trading statement once it is satisfied that a reasonable degree of certainty
exists that the financial results for the period to be reported upon next will differ by at
least 20% from the financial results for the previous corresponding period.
Shareholders are hereby advised that a reasonable degree of certainty exists that the
headline earnings per share of the Company for the six month period ending 31 March
2016 will reflect a minimum decrease of 38% or 10.0 cents per share when compared
to the 26.3 cents per share for the previous corresponding period.
Shareholders are further advised that a reasonable degree of certainty exists that
earnings per share of the Company for the six month period ending 31 March 2016
will not differ by more than 20% when compared to the previous corresponding period.
Shareholders are advised that a further trading statement will be issued as soon as
there is a reasonable degree of certainty as to the likely range within which the
Company’s headline earnings per share is expected to decrease and the likely range
within which the Company’s earnings per share is expected to increase or decrease.
The results for the six months ending 31 March 2016 have been affected by:
- Significantly increased raw material costs, associated with the drought in South
Africa that lead to record high maize prices on the Safex and continued ZAR
weakness, which negatively impacted the cost of imported raw materials. This has
specifically impacted earnings in the eggs and layer livestock business where price
recovery has not been sufficient.
- Lower production and sales volumes in the egg business due to an increased
prevalence of diseases negatively impacting poultry productivity.
- Lower earnings from African operations, impacted by instability in currencies,
higher input costs and lower sales volumes due to increased pressure on the
consumer.
- The implementation of the revised broiler business model, which resulted in the
exit of the broiler meat market and the Company becoming a livestock farmer,
supplying other abattoirs. This was completed with the sale of the Hartbeespoort
abattoir in October 2015 and has resulted in largely de-risking the broiler business
with earnings more dependent on volumes and farming efficiencies and being less
dependent on the raw material costs and selling price of broiler meat equilibrium.
This business model change is expected to contribute positively to earnings at the
half year when compared to that of the corresponding period for this segment. The
profit from the sale of the Hartbeespoort abattoir is included in the expected
earnings per share for the six months ending 31 March 2016.
The financial information on which this trading statement is based has not been
reviewed or reported on by the Company´s auditors. Quantum Foods´ financial results
for the 6 month period ending 31 March 2016 are expected to be released on SENS
on or about Thursday 26 May 2016.
Wellington
24 March 2016
Sponsor
PSG Capital (Pty) Ltd
Date: 24/03/2016 09:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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