Astral Foods (ARL) H2 2024 earnings summary

Executive summary

• Revenue increased 6.4% year-over-year to R20.5 billion, with a dramatic turnaround from a prior loss to an operating profit of R1,125 million, driven by operational improvements, cost control, and recovery in the Poultry Division.

• Headline earnings per share rose 245% to 1,920 cents, and a final dividend of 520 cents per share was declared.

• All debt was cleared, supported by a cash inflow of R1.1 billion, ending the year with a net cash position and a strong balance sheet.

• Broiler margins improved but remain thin due to retail promotional activity and constrained consumer spending.

• No bird flu incidents since October 2023, with broiler performance indicators surpassing historical levels and full restocking of breeder flocks.

Financial highlights

• Operating profit reached R1,125 million, a swing of R1.75 billion from the prior year loss of R621 million.

• Profit for the period was R753 million, compared to a loss of R512 million in the prior year.

• Headline earnings per share improved to 1,920 cents, up 245% year-over-year.

• Feed division revenue down 15.2%, profit down 28.3% due to lower internal volumes.

• Poultry division revenue up 7.7% to R17.1 billion; operating profit surged to R580 million, margin at 3.4%.

Outlook and guidance

• Bird flu remains a significant risk, with slow progress on vaccination approval for broiler breeding stock.

• Water supply disruptions and constrained consumer spending continue to impact market conditions.

• Expected interest rate cuts and retirement reforms may boost consumer spending in 2025.

• Spare processing capacity of 600,000 birds per week offers opportunities for growth without further CapEx.

• Revised capital expenditure programme to support cash flow and cost efficiency projects.