Africa-Press – South-Africa. Astral Foods has come under pressure from higher input costs, with the company having to effectively subsidise the cost of producing chicken and have its profit cut in half in the process.
This was revealed in the company’s financial results for the six months ended 31 March 2025, where Astral outlined the numerous headwinds the poultry industry continues to face.
After successfully bouncing back from the impact of bird flu on its operations a few years ago, the company has now been hit with elevated costs and the inability to pass these costs on to consumers.
Revenue for the six months increased by 3.5% to R10.7 billion due to an improvement in feed and poultry sales volumes and higher selling prices for the company’s feed.
However, Astral experienced a significant reduction in its earnings in comparison to a year ago as margin pressure in its poultry division severely impacted its profit.
As a result, the company’s operating profit decreased by 50.7% to R271 million and its margin was cut in half to 2.5%.
The poultry division is the largest contributor to Astral’s financial performance, making up around 80% of its revenue.
The division managed to sell more chickens over the period, but these sales were made at a lower price, with selling prices down 3.1% year-on-year.
This was despite higher broiler feed input costs and an increase in operating expenses in line with inflation.
As a result, the company effectively subsidised the cost of producing chicken during the period, resulting in a loss of R26 million for the poultry division.
Margins were already extremely thin going into the period under review, and, with higher input costs and lower selling prices, the broiler margin declined to -1.1%.
The company remains an extremely efficient producer of poultry products, with its sales volumes increasing by 4.4% and processing around 5.6 million chickens per week over the six months.
Apart from the declining margins in its poultry business, Astral also suffered a cybersecurity incident during the period under review.
In March 2025, a group of individuals gained access to part of the company’s network, with Astral’s poultry division being particulalry impacted.
The division experienced around two days of downtime in processing and deliveries to customers, resulting in a loss of revenue and a R20 million impact on the company’s profits.
Astral continues to implement its 3R project to Re-set, Re-focus, and Re-start parts of its business to retain its position as the premier producer of chicken in South Africa.
However, the company said it will continue to be buffeted by events out of its control, with bird flu posing a major threat to the local industry and little progress being made towards vaccination of local breeding stock.
Astral is also likely to feel some pain from South Africa’s continued economic deterioration and high unemployment levels. These factors will continue to constrain local consumer spending.
The company’s feed business continues to perform well, increasing revenue by 9.4% year-on-year and improving its margins.
This is expected to continue with the local maize crop expected to be good, helping to increase supplies and lower input costs
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