Astral Foods (ARL) H2 2024 earnings summary

Executive summary

• Revenue increased 6.4% to R20.5 billion, with a dramatic turnaround from a prior year loss of R620 million to an operating profit of R1,125 million, driven by the Poultry Division's recovery and improved operational efficiencies.

• Headline earnings per share rose 245% to 1,920 cents, and a final dividend of 520 cents per share was declared.

• All debt was cleared, supported by a cash inflow of R1.1 billion and normalized capital expenditure.

• Broiler margins improved to 1.3% from negative last year, though retail competition and constrained consumer spending keep margins thin.

• No bird flu incidents since October 2023, with broiler performance indicators surpassing historical levels.

Financial highlights

• Revenue rose to R20,480 million from R19,251 million year-over-year; operating profit rebounded to R1,125 million from a loss of R621 million.

• Net profit for the period was R753 million, compared to a loss of R512 million in the prior year.

• Headline earnings per share improved to 1,920 cents, up 245% year-over-year.

• Net cash inflow of R1,095 million enabled debt clearance; closing cash balance at R13 million.

• Capital expenditure normalized at R275 million, focusing on essential infrastructure and efficiency.

Outlook and guidance

• Bird flu remains a significant risk, with slow progress on vaccination approval for broiler breeding stock.

• Water supply disruptions, infrastructure challenges, and constrained consumer spending continue to impact market conditions.

• Interest rate cuts and retirement reforms may boost consumer spending in 2025.

• Spare processing capacity of 600,000 birds per week positions the group for volume growth without additional capex.

• Revised capex program supports cash flow and cost efficiency projects.