South African poultry producer Astral Foods reported a 52% fall in half-year earnings on Monday, weighed down by a significant profit decline in the poultry division.
A newly legislated minimum wage, rotational power cuts, water supply interruptions in Standerton and costs associated with industrial action in KwaZulu-Natal all contributed to higher costs, Astral said.
Astral, which also manufactures animal feed, said headline earnings per share (Heps) for the six months ended March, fell to R9.49 from R19.59 a year earlier.
Heps strips out once-off items and is the main profit measure in South Africa.
The company’s poultry division reported a 68.9% drop in profit to R285 million ($20.01 million), driven largely by the higher feed input costs and lower sales, it said.
“The under recovery of increased input costs, as well as the influence of extraordinary expenses, negatively impacted profitability for this division,” the firm said.
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When the myopic socialists at the DTI lowered the import tariffs on chicken, sugar, wheat etc they signed the death sentence of these industries. DTI stands for Destruction of Trade and Industry.
The only viable and stable industry in South Africa is the automotive industry that receives huge subsidies from the taxpayers as well as protection against imports in the shape of 30% import tariffs. The taxpayers are buying jobs in this industry.
This is how the toxic combination of ignorance and arrogance kills an economy.
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