Astral Foods (ARL) H1 2025 earnings summary

Executive summary

• Revenue grew 3.5% to R10.7 billion for the six months ended 31 March 2025, driven by higher poultry and feed sales volumes, but profitability was severely impacted by input cost inflation and selling price deflation.

• Operating profit fell 51% to R271 million, with headline earnings per share down 54% to 409 cents, and net margin in the broiler division turning negative at -1.1%.

• Cash position improved to R259 million, enabling an interim dividend of 220 cents per share, following a return to dividend payments after significant debt reduction in 2024.

• The group faced headwinds from higher feed costs due to drought-driven maize price increases, persistent selling price pressure, and a R20 million cybersecurity incident in March 2025.

Financial highlights

• Revenue up 3.5% year-over-year, mainly from a 4.4% increase in poultry sales volumes and 5.9% in feed sales volumes.

• Operating profit margin dropped to 2.5% from 5.3% in the prior period.

• Profit before tax down 48% to R251 million; attributable profit down 49% to R182 million.

• Cash generated from operations was R577 million, with R132 million spent on capital expenditure.

• Headline earnings per share at 409 cents, down 54% year-over-year.

Outlook and guidance

• Bird flu remains a significant risk, with delayed vaccination approvals and no compensation or insurance available.

• Economic headwinds in South Africa, including high unemployment and weak investment, are expected to constrain consumer spending.

• AGOA trade access is under threat, potentially impacting exports.

• Positive prospects include a strong local maize crop expected to ease feed costs in the second half, lower poultry stock levels, and increased broiler placements aiming for 5.9 million birds per week by July.

• Focus remains on cost control, efficiency improvements, and recovering selling prices to restore margins.