AVI (AVI) H2 2024 earnings summary

Executive summary

• Achieved strong financial results in a challenging macroeconomic and consumer environment, with group revenue up 6.3% to R15.86 billion and operating profit up 21.7% to R3.3 billion, driven by innovation, price increases, and robust cost management.

• Headline earnings per share rose 24.1% to 687.1 cents, with strong cash generation enabling a reduction in net debt and supporting higher dividends.

• Focused on balancing volume and value, protecting gross margins, and maintaining operational efficiencies.

Financial highlights

• Revenue grew 6.3% year-over-year to R15.86 billion, with gross profit up 13.5% to R6.61 billion and gross margin at 41.7%.

• Operating profit increased 21.7% to R3.3 billion, with margin rising from 18.2% to 20.8%.

• Headline earnings reached R2.27 billion (+24.2%); HEPS at 687.1 cents (+24.1%).

• Cash generated by operations increased 22.7% to R3.78 billion; cash conversion at 98.1%.

• Net debt reduced to R876.3 million; net debt to capital employed at 19.7%.

• Dividend yield at 9.2% on closing share price; R2.9 billion returned to shareholders in FY24.

Outlook and guidance

• Management expects continued constrained consumer demand and increased competition, with margin pressure likely to persist.

• Well-hedged on key commodities, providing margin confidence for H1; cost control and efficiency projects remain a focus.

• Ongoing investment in production resilience and efficiency, with capital projects planned to address infrastructure challenges.

• I&J's performance remains highly dependent on catch rates, fuel prices, and Asian demand for abalone; new vessel acquisition and sale of squid operation to support future performance.

• Sufficient capacity to accommodate moderate growth if macroeconomic conditions improve.