Profitable year for Quantum Foods as egg unit performs … excellently
For the past two years, poultry producers have benefited from lower input costs, which came after a bumper summer grain harvest and a stronger rand
Quantum Foods expects another year of bumper profits, but signalled that high feed costs were starting weigh on it.
For the past two years or so, poultry producers have benefited immensely from lower input costs, which came courtesy of a bumper summer grain harvest and a relatively a stronger rand.
The primary ingredients in poultry feed are maize and soya. Maize prices have since bottomed out and have been steadily rising in recent months, while the rand has been much weaker of late.
Quantum Foods, which was unbundled from food producer Pioneer Foods several years ago, expects headline earnings per share to rise at least 219% in the year to September, from the matching period a year ago.
Its egg business was a standout performer, though it said margins in the segment declined due high feed costs and a decline in egg prices.
The company also received R22m from insurers, compensating partly for the avian flu losses that occurred in 2017 and in the first half of 2018.
Quantum Foods counted on its African operations, which it said noted improved trading conditions.
The share price was up as much as 17% to a high of R4.75 in midmorning trade on Wednesday, though in thin trading volumes.