AVI (AVI) H1 2025 earnings summary

Executive summary

• Revenue increased 1.1% year-over-year to R8,470.9 million, with operating profit up 8.9% to R1,965.1 million and headline earnings per share rising 8.9% to 407.5 cents, supported by price increases and cost control despite constrained consumer demand.

• Gross profit margin improved to 42.9% from 41.5%, driven by cost efficiencies and operational leverage.

• Interim dividend increased 8.9% to 220 cents per share, with strong cash generation and a return on capital employed of 34.2%.

• Profit after tax of R12.6 million recognized from the disposal of the squid fishing operation.

• The business remains focused on protecting margins, managing costs, and maintaining strong capital returns amid ongoing market challenges.

Financial highlights

• Operating profit margin improved to 23.2% from 21.5% year-over-year.

• Headline earnings increased 9.1% to R1,350.2 million; net profit rose 10.2% to R1.36 billion.

• Cash generated by operations increased 16.4% to R2.16 billion; working capital to revenue at 24.3%.

• Net finance costs rose to R107.5 million due to higher debt after special dividends; net debt increased to R2.55 billion.

• Capital expenditure totaled R424.8 million, mainly for a new freezer vessel and production upgrades.

Outlook and guidance

• The outlook remains muted due to macroeconomic uncertainty, with no clear sign of demand recovery and growth rates expected to slow if conditions persist.

• Cost management, hedging, and innovation are priorities; further restructuring costs anticipated, especially in Green Cross.

• I&J's outlook depends on fishing performance, fuel prices, and exchange rates; new freezer vessel to increase capacity from February 2025.

• Footwear & Apparel to focus on cost control, trading density, and new brand launches; restructuring costs expected in H2.

• Planned H2 capital expenditure of R225 million, with a full-year total of R650 million, focused on production upgrades and infrastructure resilience.