If the chicken producer’s predictions come true, consumers might be subjected to higher chicken prices to recoup the loss.
South Africa’s largest chicken producer, Astral, says it will likely report poor results for the six months ending 31 March 2025, due to lower chicken prices and higher costs hurting its business and profits.
Astral’s troubles started in 2023, when the country was faced with load shedding and the bird flu outbreak. However, this changed in 2024, as the company recovered and recorded significant profit.
If the chicken producer’s predictions come true, consumers might be subjected to higher chicken prices to recoup the loss.
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Astral first warning
Astral issued its first warning early this year, citing price deflation in chicken sales has placed severe pressure on its net margins.
This was attributed to constrained consumer environment and extensive retail promotional activity on frozen chicken, that placed pressure on selling prices.
“Together with an increase in poultry feed input costs following the drought of 2024 and higher local maize prices, earnings for the first half of 2025 will be lower than a strong set of results for the period ended 31 March 2024,” read the chicken producer’s voluntarily trading update released on 24 March 2025.
Astral faces challenging times
In its Sens announcement released on Monday, Astral told shareholders that it predicts its earnings per share (“EPS”) is to decrease between 55% and 45% compared to the six months ended 31 March 2024. EPS is a simple way to measure how much money a company makes for each share of its stock.
Its headline earnings per share (“HEPS”) are expected to decrease between 60% and 50% compared to the prior comparable period. HEPS removes unusual or one-time items from the profit to show the company’s core earnings.
The chicken producer has done this in line with the terms of the Listings Requirements of the JSE Limited.
“Companies are required to publish a trading statement as soon as they become reasonably certain that the financial results for the period to be reported on will differ by at least 20% from those of the previous corresponding period.”
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Results to be released
Astral has attributed the above decrease in earnings to the factors they announced earlier in the year.
“The financial information contained in this announcement has not been reviewed and reported on by the Group’s auditors.” The audited results are expected to be released on 19 May 2025.
In their earlier voluntary trading update, the producer said they expect EPS and HEPS for the first half of 2025 to decrease by more than 55% and 60%, respectively.
Cybersecurity breach
The chicken producer lost R20 million in profits earlier this year due to a cybersecurity breach.
The cybersecurity incident negatively impacted the poultry division by causing processing and customer delivery downtime.
However, there was no confidential information or sensitive data of customers, suppliers or individual stakeholders that was compromised.
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