Here's why chicken prices might increase soon
If the chicken producer's predictions come true, consumers might be subjected to higher chicken prices to recoup losses.
South Africa's largest chicken producer, Astral, says it will likely report poor results for the six months ending 31 March 2025, due to lower chicken prices and higher costs hurting its business and profits.
Astral's troubles started in 2023, when the country was faced with load shedding and the bird flu outbreak. However, this changed in 2024, as the company recovered and recorded significant profit.
If the chicken producer's predictions come true, consumers might be subjected to higher chicken prices to recoup the loss.
ALSO READ: Here is why egg prices are high and could increase in future
Astral first warning
Astral issued its first warning early this year, citing price deflation in chicken sales has placed severe pressure on its net margins.
This was attributed to constrained consumer environment and extensive retail promotional activity on frozen chicken, that placed pressure on selling prices.
'Together with an increase in poultry feed input costs following the drought of 2024 and higher local maize prices, earnings for the first half of 2025 will be lower than a strong set of results for the period ended 31 March 2024,' read the chicken producer's voluntarily trading update released on 24 March 2025.
Astral faces challenging times
In its Sens announcement released on Monday, Astral told shareholders that it predicts its earnings per share ('EPS') is to decrease between 55% and 45% compared to the six months ended 31 March 2024. EPS is a simple way to measure how much money a company makes for each share of its stock.
Its headline earnings per share ('HEPS') are expected to decrease between 60% and 50% compared to the prior comparable period. HEPS removes unusual or one-time items from the profit to show the company's core earnings.
The chicken producer has done this in line with the terms of the Listings Requirements of the JSE Limited.
'Companies are required to publish a trading statement as soon as they become reasonably certain that the financial results for the period to be reported on will differ by at least 20% from those of the previous corresponding period.'
ALSO READ: Egg prices increasing globally due to US shortage — Should SA take advantage and export?
Results to be released
Astral has attributed the above decrease in earnings to the factors they announced earlier in the year.
'The financial information contained in this announcement has not been reviewed and reported on by the Group's auditors.' The audited results are expected to be released on 19 May 2025.
In their earlier voluntary trading update, the producer said they expect EPS and HEPS for the first half of 2025 to decrease by more than 55% and 60%, respectively.
Cybersecurity breach
The chicken producer lost R20 million in profits earlier this year due to a cybersecurity breach.
The cybersecurity incident negatively impacted the poultry division by causing processing and customer delivery downtime.
However, there was no confidential information or sensitive data of customers, suppliers or individual stakeholders that was compromised.
NOW READ: Here are the economic and social impacts of bird flu
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Citizen
3 days ago
- The Citizen
‘We have a National Treasury problem': Fuel levy hike defended amid criticism over tax strategy
At least R3.5 billion in revenue would be lost by not increasing the fuel levy, according to National Treasury. Petrol pumps are pictured at a filling station in Melville on 20 January 2021. Picture: Tracy Lee Stark The National Treasury has defended its decision to increase the general fuel levy in the budget 3.0 amid criticism over its broader tax policy. On Friday, officials from the Treasury and the South African Revenue Service (Sars) appeared before Parliament in a joint meeting of the Standing Committee on Finance and the Select Committee on Finance. They were responding to public submissions on the fiscal framework and revenue proposals, which outline South Africa's economic policies, revenue projections, and government expenditure limits. This follows the tabling of Finance Minister Enoch Godongwana's third national budget for the 2025/2026 financial year, after months of political impasse. The budget includes a fuel levy increase of 16 cents per litre for petrol and 15 cents for diesel, effective from 4 June. However, the Economic Freedom Fighters (EFF) are challenging the hike in court. National Treasury's revenue projections Treasury's head of tax and financial sector policy, Christopher Axelson, addressed the committee on the revised revenue outlook. Axelson noted that revenue projections had decreased by R61.9 billion compared to the budget tabled in March. This decline was driven in part by the withdrawal of proposed increases to value-added tax (VAT) and adjustments to zero-rated items. 'That increase was reduced slightly, but it still required a large amount of additional revenue to make sure we have a fiscally sustainable trajectory for our debt and debt-service costs, and because of that, this May 2025 budget does include R18 billion in additional revenue for 2025/2026 and has R1 billion in tax relief in 2026/2027,' the Treasury official said. He also indicated that a further R20 billion in unspecified tax policy adjustments is anticipated for the 2026 budget. To fund expenditure priorities, Treasury has opted for a range of tax measures, including no changes to personal income tax brackets or rebates, an inflationary increase in the fuel levy, and above-inflation hikes in excise duties on alcohol and tobacco. Diesel refund relief for primary sectors was also announced. ALSO READ: Budget 3.0: Fuel levy replaced VAT hike but is it the better option? Axelson pointed out that past personal income tax increases had failed to raise the intended revenue, while corporate income tax remains 'highly volatile'. 'Corporate income tax increases are the most damaging to growth, and if you reduce growth, it reduces the tax bases as well, so it is not as effective.' Axelson pointed out that a VAT increase was the most efficient revenue-raising option but had to be scrapped due to opposition. As a result, a bulk of the revenue shortfall was addressed by not adjusting personal income tax and rebates for inflation. He also explained that Treasury has aimed to avoid increasing taxes over the last five years in an effort to support economic recovery, adding that the country's tax system was 'progressive'. National Treasury defends fuel levy hike Moreover, Axelson responded to comparisons between the fuel levy hike and a VAT increase. 'The quantum is very different. The VAT increase over three years would have raised about R75 billion. Increasing the fuel levy by inflation is closer to around R12 billion.' He defended the levy hike, arguing that it had not been raised in the previous three budgets. 'Part of that was due to the very high oil, petrol and diesel prices [but] those have been coming down lately. The recent non-adjustment in the March budget was to provide relief for VAT.' READ MORE: VAT reversal overshadowed by fuel levy hike Axelson emphasised that the fuel levy is a significant source of state revenue, contributing about 5% to total tax revenue. 'This is a specific tax, a cents per litre, so these kinds of specific taxes, which are the same as excise duties, they need to be adjusted by inflation; otherwise, the real value of that tax will go down over time.' He warned that Treasury would lose about R3.5 billion in revenue by failing to increase the fuel levy. 'The vast majority of the tax revenue increase is all on the personal income tax side. Around R16.7 billion of the R18 billion in increases is all on personal income tax.' Watch the meeting below: Axelson told the committee that various alternative revenue proposals – such as eliminating the employment tax incentive (ETI), increasing corporate income tax, introducing a wealth tax, and partially adjusting tax brackets – will be considered in the 2026 budget. 'A lot of them are very good and interesting proposals which we are going to have to consider very carefully and hopefully have a more consultative process before the next budget.' He added that although the finance minister has the authority under the Customs and Excise Act to implement an interim fuel levy adjustment via a notice in the government gazette, Parliament has the right to intervene. 'We do hope the notice will be published quite soon [but] Parliament may decide to intervene [as] there is legislative oversight.' Tax policy criticised Civil society and political parties reacted strongly to the Treasury's presentation. The Budget Justice Coalition, one of the organisations that made submissions, rejected claims of a progressive tax system. 'Our tax system can look progressive on paper, but it doesn't actually work that way, and we know that all too well in a country that is marked by some of the highest levels of inequality,' the organisation's chairperson, Matshidiso Lencoasa, said. She argued that South Africa's tax policy burdens the poor, while wealthy individuals and corporations continue to exploit loopholes to their advantage. READ MORE: Fuel levy pain: Brace for possibility of petrol price hike in June Lencoasa further criticised the proposed VAT and fuel levy increases, describing them as 'blunt instruments' that would place a heavier financial strain on the country's most vulnerable populations. Pieter Faber, senior executive of taxation at the South African Institute of Chartered Accountants (Saica), also expressed concern. Faber said the institution cannot support further tax increases in an already high-tax environment, especially amid rising national debt and ongoing concerns about the lack of government accountability, as highlighted in the Auditor-General's report on local government this week. Fuel levy increase under scrutiny MK Party MP Des Van Rooyen criticised the delayed implementation of alternative proposals. 'My expectation was that most of the inputs would be accommodated in this budgeting cycle,' Van Rooyen said. He asserted that the fuel levy increase was more regressive than the scrapped VAT hike. 'There should be a thunderous response against this proposal.' Democratic Alliance (DA) MP Pieter Britz called for a fairer distribution of the tax burden. READ MORE: EFF files urgent interdict to stop proposed fuel levy hike EFF MP Omphile Maotwe strongly disagreed with Treasury's position on the fuel levy. 'National Treasury refuses to increase corporate income tax for ideological reasons and not practical ones. They oppose a wealth tax because their underlying assumption is that the state must serve those who already have wealth.' She also challenged the narrative of a progressive tax system. 'The claim that our tax system is progressive cannot be taken seriously,' Maotwe said, accusing the department of ignoring alternative proposals. 'It is clear that we have a National Treasury problem,' she added.
Eyewitness News
3 days ago
- Eyewitness News
SARS expects to see impact of increase in tax collection efforts from Q2
CAPE TOWN - The South African Revenue Service (SARS) said the impact of it ramping up its efforts to collect more taxes would be felt by the second quarter of this financial year. Treasury again warned Parliament on Friday that it would increase taxes next year in efforts to plug a R20 billion budget shortfall in the next financial year if SARS doesn't produce the money. SARS is receiving R7.5 billion over the next three years to bolster its capacity to collect more taxes, which it estimates could be as much as R50 billion a year. ALSO READ: • Expanding list of tax-free food items won't benefit poorer households: Treasury • Treasury defends fuel levy increase Last week, SARS Commissioner Edward Kieswetter, said the aim was to employ at least 1,700 more staff to allow it to go after those not paying taxes. On Friday, the revenue service's head of legislative policy tax, Franz Tomasek, told Parliament's finance committees it was still in the process of training and appointing more debt collecting staff. "Our initial focus is going to be on undisputed debt. But that will need to be underpinned by revenue recovery measures targeting the tax gap as we move into the outer years. The results will be reported monthly, and bearing in mind the ramp-up period, we are expecting those efforts to start gathering pace by the beginning of the second quarter of this year." Tomasek said he hoped these efforts would mean the finance minister would reconsider his intention to raise taxes next year.
The Citizen
3 days ago
- The Citizen
Tshwane councillors clash over budget
The Tshwane metro council meeting at Tshwane House witnessed intense debates as councillors scrutinised the latest budget. The budget, above R50-billion, was presented by the MMC for Finance and Deputy Mayor Eugene Modise last month. The debates, marked by political tensions and divergent views, highlighted the metro's ongoing financial challenges and the complexities of governance. Modise tabled a fully funded budget for the 2025/26 financial year in a move towards financial sustainability and improved service delivery. The budget was formally endorsed by the National Treasury, marking an achievement for the municipality, previously plagued by financial instability. He hailed his budget as a turning point in Tshwane governance and fiscal management. The budget doesn't rely on external loans or borrowing, which Modise described as 'historic and a reflection of responsible leadership'. Despite the budget's passage with 113 votes, opposition parties raised concerns. The DA rejected and criticised the budget, and described it as using residents as 'cash cows'. DA councillor Jacqui Uys highlighted that the ANC in Tshwane has ignored opposition voices and included another punitive tax on residents. Uys said the plan is to tax every single resident who cannot afford to use the metro's rubbish collectors, at R500 per month, by forcing them to pay R200 per month in the form of a City Cleansing Levy. 'Private waste collectors already pay a fee to utilise the metro's dumping grounds, and those using private collectors will now pay double. Those who cannot afford the metro's rates will be penalised for being poor. 'R20-million is allocated to pay for an advisor, who will facilitate transactions, getting the Rooiwal and Pretoria West Power Stations operated privately. However, the fine print makes it clear that there is no plan to rid Tshwane of Eskom's 93c/KwA Wheeling tariff,' said Uys. She said no independent power producer will be able to sell electricity at the loss this tariff causes. 'The deputy mayor, in his budget speech, celebrated that the water woes of Ikageng are over. In Ikageng, the taps are dry, but water tankers can be found everywhere. This budget has almost doubled the Water and Sanitation Department's water tanker budget.' As Tshwane navigates its financial recovery, the effectiveness of the implemented measures and the administration's commitment to equitable service delivery will remain under scrutiny. Godwin Ratikwane of the EFF commended the MMC of Finance for presenting an improved budget that directly addresses long-standing social injustices raised by communities in the township and informal settlements. He said this budget 'reflects a decisive departure from the neglect of the past administrations and stands as a testament to the party's commitment to uplift the marginalised and make it great again'. 'The fully funded budget backed by the National Treasury is a clear signal that this administration is not merely making hollow promises, but taking concrete steps to transformative change. 'Let it be known that the R1.7-billion allocated to emergency services will revitalise the department, long neglected, and address the communities and the staff shortages that have jeopardised public safety,' said Ratikwana. LISTEN: ActionSA's Tshepo Modiba said this budget is not just a compliance exercise but a plan for inclusive development, service delivery, acceleration, and financial resilience. 'It gives life to the service delivery priorities we have set as a collective. It is a budget that passes both the test of legality and the test of vision. 'We acknowledge that the majority of revenue comes from service charges, and we are strengthening the social package to protect the vulnerable. This budget ensures we maintain the balance between financial stability, sustainability, and social responsibility,' said Modiba. FF Plus councillor Grandi Theunissen rejected the budget and said it places a financial burden on residents, businesses, and property owners. He said instead of the budget fostering growth and stability, it prioritises revenue, extraction over ethical governance, disregards economic realities and fails to uphold financial justice. 'The new valuation role has caused property values to increase for an average of 24.17%, drastically increasing municipal tax obligations, the metro claims to soften the impact by 4%, and adjusting the threshold from R150 000 to R250 000. 'The controversial city cleaning levy unfairly targets households and businesses that do not rely on municipal waste collection, forcing them to pay for services that they do not use. This levy amounts to double taxation,' he said. LISTEN: Modise said the passing of the budget by the council marks a turning point for Tshwane's financial governance and service delivery capabilities. 'The approval of this budget restores credibility to the city's institutional capacity and sends a clear message that Tshwane is moving forward with purpose, discipline, and unity of vision. 'This outcome reflects extensive work behind the scenes, from council engagements to technical planning, all in service of building a city that works better for its people,' Modise said. Do you have more information about the story? Please send us an email to bennittb@ or phone us on 083 625 4114. For free breaking and community news, visit Rekord's websites: Rekord East For more news and interesting articles, like Rekord on Facebook, follow us on Twitter or Instagram or TikTok. At Caxton, we employ humans to generate daily fresh news, not AI intervention. Happy reading!
