Astral to press on with production efficiency and cost control
The poultry producer’s operating profit rises 79% to a record high of R1.9bn
Astral Foods, the “big bird” of the JSE’s poultry sector, will press on with its focus on production efficiency and cost containment in the 2019 financial year. CEO Chris Schutte’s determination in maintaining a lean and mean operating regime led to operating profit kicking up 79% to a record level of R1.94bn. This reflected a fatter operating profit margin of 15% compared with 2017’s leaner 8.7%. However, Astral, which prides itself on being the lowest-cost South African chicken producer, on Monday reported only a slender 4.5% increase in revenue to R13bn in the year to end-September. Independent small and mid-cap analyst Anthony Clark noted that despite having the festive trading period ahead, these results were the peak of the current cycle, and profits expectations should be tempered for the 2019 financial year. He said this explained the weaker Astral share price on Monday.
Schutte said Astral managed to keep a lid on costs in the poultry and feed segments, and also manag...