Power cuts, avian flu cut into Astral's profits

JOHANNESBURG - Astral Foods says the persistent power cuts are having a severe negative impact on its bottom line.

In a voluntary trading update, the company says it spent R741 million for the six months ended 31 March to mitigate the challenges.

READ: SA'S ELECTRICITY CRISIS | POWER CUTS CAUSE BUSINESS INSTABILITY

This included diesel costs for generators, costs associated with a cutback in poultry production in order to catch up on the backlog in the slaughter programme, higher feed costs for older broilers, and overtime costs for workers.

The total costs of the blackouts, including capital costs of R200 million, will amount to nearly R2 billion for the financial year.

This is cited as the main reason for the severe decline in Astral's results for the year ending 30 September.

Furthermore, Bird Flu is also expected to have a devastating impact, with additional costs being incurred to cull broiler breeding stock in line with disease control measures.
This also includes the cost of the safe disposal of birds and biosecurity measures to curb the spread of the disease.

READ: PROBE INTO AVIAN FLU STRAIN UNDERWAY

To date, the total costs for the sector associated with the current outbreak amount to over R200 million.

Astral is expecting earnings to plummet by up to 165%.