QUANTUM FOODS HOLDINGS LIMITED - Trading Update For The 4 Months Ended 31 January 2018

Trading Update For The 4 Months Ended 31 January 2018

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 UPDATE FOR THE 4 MONTHS ENDED 31 JANUARY 2018


The favourable feed raw material cost position of the second
half of 2017 continued during the first four months of the 2018
financial year, although partially offset by further Avian
Influenza losses occurred in the Western Cape layer farming
operations.

South African operations

The feeds business performed satisfactorily with stable Rand per
ton margins and profitability compared to the previous year.
External feed sales volumes grew by 11.7%. This compensated for
the decline in the feed requirement from the farming operations
of the Group. The decline in feed in the layer farming operations
was caused by the lower hen numbers due to Avian Influenza and
in the broiler farming operations by the lower feed consumption
achieved per bird reared.

The farming business also performed in line with expectation,
despite the additional loss of 242 000 birds following the
further outbreak of Avian Influenza on a layer rearing farm in
the Western Cape in the current year and fewer eggs being
produced following the Avian Influenza outbreaks in the Western
Cape in September 2017.

The egg business experienced significant tailwinds in the
period. Compared to the first four months of 2017, average
selling prices per dozen increased by 32.0% and egg production
costs were lower due to the decline in feed costs. Egg sales
volumes declined by only 5.6% due to Avian Influenza production
losses, but the profit effect of the improved margins is expected
to be substantial for the first half of the financial year.

African Operations

Production costs decreased in all three other African businesses
following the decline in feed raw material costs. This together
with stronger demand from the market for day old chicks and eggs
is expected to result in improved margins and profitability for
the first half of the financial year.
Outlook

The outlook for the remainder of the financial year to 30
September 2018 should reflect an improved performance compared
to the previous year due to the anticipated:

-   stable performance in the feed and farming businesses;
-   higher profitability in the egg business; and
-   improved trading conditions in other African countries.


This outlook could however be materially impacted by primarily
the following factors:

-   any further impact of Avian Influenza, especially in any of
    the large facilities of the Group that houses a significant
    number of birds; and
-   any change in the cost of feed raw materials, either due to
    lower than expected grain crops in the 2018 harvest season
    or a change in the value of the Rand against the US Dollar
    that will impact both maize and soybean prices.

The financial information on which this trading update is based,
has not been reviewed or reported on by the Company´s external
auditors.

Wellington
5 February 2018

Sponsor
PSG Capital Proprietary Limited

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