Astral Foods’ operating profit plunges by 50% to US$15.2M

SOUTH AFRICA – Astral Foods has seen its operating profit fall by more than half in the first half of its financial year, with the group citing pressure from rising input costs and declining poultry prices.

For the six months ending 31 March 2025, operating profit declined by 50.7% to around US$15.2 million (R271 million), with the poultry division swinging from a profit to a loss over the period.

Overall group revenue increased by 3.5% to roughly US$593.5 million (R10.7 billion), supported by higher volumes and stronger selling prices in the animal feed segment.

However, the poultry business remained under strain, with revenue edging up by just 1.5% to US$488 million (R8.8 billion) and operating income dropping to a loss of US$1.5 million (R26 million), down from a profit of US$16 million (R284 million) a year earlier.

The group said average poultry selling prices were down 3.1% compared to the previous year, while feed costs and other operating expenses continued to rise.

According to CEO Gary Arnold, the company was unable to pass these higher costs on to consumers and was forced to subsidise production to remain competitive in a saturated market.

The company also faced unexpected disruptions during the period due to a cybersecurity breach in March that affected parts of its network.

While Astral responded quickly to the incident, the poultry segment experienced two days of downtime, which delayed processing and distribution and led to estimated financial losses of US$1.1 million (R20 million).

Despite the challenges, broiler sales volumes rose by 4.4%, reaching about 5.6 million birds per week, although margins turned negative at -1.1%, down from 2.4% the previous year.

Outlook Remains Uncertain

Looking ahead, Astral Foods warned of several risks that could affect recovery in the second half, including the ongoing threat of avian flu and slow regulatory approval of vaccines for breeding stock.

In addition, the company pointed to weak economic conditions in South Africa, such as high unemployment, sluggish infrastructure development, and stagnant job creation, which are likely to limit consumer spending on poultry products.

It also flagged concerns over potential changes to South Africa’s trade status under the African Growth and Opportunity Act (AGOA), which could impact future export prospects.

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