Latest news with #GaryArnold
IOL News
4 days ago
- Business
- IOL News
Astral Foods calls for government support as bird flu vaccination programme expands
At any one point, Astral runs with about 4 million broiler breeders in stock although the company will not necessarily be vaccinating all of them. Image: Supplied Tawanda Karombo Astral Foods, which is planning to expand its recently approved bird flu vaccination programme, wants the government to ease conditions for such initiatives and to finalize payments of compensation to the industry for birds culled to control diseases in the past few years. This appeal comes in the wake of mounting challenges within the poultry industry, which has been grappling with heightened biosecurity risks following successive bird flu outbreaks. Gary Arnold, CEO of Astral Foods, told Business Report in an interview on Tuesday that the company will ramp up its poultry vaccination against bird flu. This comes after the company on Monday announced that the Department of Agriculture had approved its bird flu vaccination program at one of its farms in the country. 'It's only 5% being vaccinated. We do have plans to expand it. We'll have to (expand it), now that we have firmed up the process with the Department of Agriculture,' Arnold said. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. 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Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ However, the company said it would be helpful if the government sped up compensation payments to the industry for birds culled as a disease control mechanism. Arnold, nonetheless, reckons that 'bio-security is the responsibility of producers' as the government doesn't have resources and ability to go around to everyone's farm enforcing it. The government had to aid the industry to enhance bio-security through easing regulatory processes and procedures. 'The government can help through regulatory reforms. The conditions under which we are allowed to vaccinate are very stringent and expensive because you have to comply with all the monitoring and surveillance and this makes it very difficult for everyone to vaccinate,' said Arnold. The South African Poultry Association has been engaging industry regulators over the past 18 months to thrash out a set of guidelines that the industry believes are less onerous to implement but still enforceable. The industry is pursuing recognition of conditions around which producers can vaccinate without exposing the whole industry to any unnecessary risk. This comes at a time when the South African poultry industry is facing heightened biosecurity risks. This has made it imperative for industry players to be extra careful of risks assocxiated with spreading the disease. 'Monitoring and surveillance of flocks is extremely important once they're vaccinated, (but) that is also a cost attached to that, but it is critical to ensure the safety of the livestock in South Africa,' explained Arnold. But with the approval of the vaccination program for one farm, Astral Foods hopes to 'expand this to include other' farms it runs. Arnold added that the company's intention was always 'to get one blueprint farm going that could guide both the Department of Agriculture and ourselves' on the process. The vaccination against bird flue costs the company about R2 to R2.50 per bird over its life cycle. It is a necessary cost for Astral which together with other industry players in SA and globally that nolonger have access to bird flue insurance. 'Astral used to pay a premium for bird flu insurance. Now, bird flu insurance is no longer available to any producer in this country and globally… They stopped it after 2023 because of the large claims that they had against them on the severe outbreak in 2023 so that was the last time that insurance cover was available,' Arnold revealed.
IOL News
19-05-2025
- Business
- IOL News
Astral Foods CEO discusses the impact of US trade tensions on South Africa's poultry secto
South Africa's 70 000 ton a year duty free import concession to the US has not been filled this year due to bird flu breaking out in that country, said Astral Foods CEO Gary Arnold. Image: supplid South Africa's poultry industry would like a seat at the table if there are any changes on import tariffs or quotas on the US imports, even though at this stage, it will be unaffected directly by a cessation of the Africa Growth and Opportunity Agreement (Agoa), said Astral CEO Gary Arnold. Currently, South Africa allows a 70 000-ton duty-free chicken import quota from the US, but this figure barely got filled last year, and there have been no chicken imports from the US this year because of the outbreak of bird flu in the US, Gary Arnold, CEO of South Africa's largest integrated poultry producer Astral Foods, said on Monday. He said he was more concerned about the potential impact on the broader South African economy of lower exports to the US, due to the trade tensions and recent imposition of a 10% import duty, with the possibility that this might even rise further. His comments come as President Cyril Ramaphosa heads a ministerial delegation for talks with US President Donald Trump in Washington on Wednesday, to reset relations between the two countries and regarding the African Growth and Opportunity Act that provided duty-free access for South African exports to the US, including cars and agricultural products. Arnold said in an online briefing at the release of Astral interim results that the imposition of the 10% import duty meant that technically, the duty-free chicken quota fell away, but there was no certainty on this yet, and much would depend on the bilateral talks this week and the outcome of talks to renew Agoa scheduled for September. South Africa had allowed the 70 000-ton duty-free import quota of poultry to South Africa in 2015 as part of a concession to the US, in return for broader economic benefits to be gained from the Agoa agreement. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Arnold said imported chicken currently only accounts for about 21% to 22% of local consumption, which is a far cry from the time of the imposition of anti-dumping duties and the signing of the Poultry Sector Master Plan in 2019, when imports made up more than 30% of local consumption. The local industry had taken up that production and created new jobs since then, he said. Questioned about the possible impact on the local market of one of South Africa's leading producers, Daybreak Foods, being in financial distress, he said this might result in some supply constraints to the retail market. He said Astral was still seeing strong demand after it had decided last year, before the travails at Daybreak, to increase production this year. Astral Foods' earnings for the six months to March 31 fell after margin pressure in the poultry division resulted in operating profit falling by 50.7% to R271 million. A R2.20 interim dividend was declared. The balance sheet and cash flow were strong, he said. 'We experienced significant poultry selling price deflation which, with higher input costs, led to negative poultry margins. Astral subsidised the cost of producing chicken, as higher feed and other inflationary costs could not be passed on in selling prices due to a competitive poultry market landscape,' he said. He said they were having to raise prices just to get to the pricing position that the group was in the first half of the last financial year, and in a position where it was not subsidising the cost of production. Revenue for the Feed Division increased by 9.4% to R5.3 billion from higher sales volumes and feed selling prices. Sales volumes increased 5.9% - feed sales to the commercial layer sector recovered following the bird flu outbreak in the industry during the latter part of 2023. Poultry Division revenue increased 1.5% to R8.8bn from higher sales volumes. But poultry selling prices were 3.1% lower. This, along with higher poultry feed input costs - SAFEX yellow maize price increased by 28% to an average R5 004 per ton for the period - and an increase in inflationary operating expenses, resulted in a loss of R26 million versus a R284m interim profit the year before. Arnold said the maize price peaked at around R5 700 per ton early this year, but had already come off to around R4 000 per ton. 'The expectation of a larger local maize crop is likely to benefit maize prices going forward. Lower poultry inventory levels should assist in recovering poultry selling prices after months of price deflation. Furthermore, Astral has increased broiler placement numbers which provides us with an opportunity to grow sales,' he said. Visit:
Yahoo
19-05-2025
- Business
- Yahoo
Rising feed costs and falling poultry prices hit Astral Foods' first-half earnings
Astral Foods has posted a decline in first-half profits as lower poultry prices and higher feed costs weighed on earnings. Despite reporting growth in revenue and volumes, the South African group said it had to subsidise poultry prices during the period to remain competitive. For the six months ended 31 March 2025, revenue rose 3.5% to R10.7bn ($593.5m), driven by increased volumes and higher selling prices in the group's feed division. However, operating profit fell by 50.7% to R271m, primarily due to margin pressure in the poultry business. Revenue from Astral Foods' poultry division inched up 1.5% to R8.8bn but the unit swung to a R26m operating loss, compared with a R284m profit a year earlier. The group attributed the downturn to a 3.1% year-on-year decline in poultry selling prices, alongside rising feed input costs and higher operating expenses. According to Gary Arnold, Astral Foods' CEO, the company 'subsidised the cost of producing chicken, as higher feed and other inflationary costs could not be passed on in selling prices due to a very competitive poultry market landscape'. In March, the company also suffered a cybersecurity breach, resulting in unauthorised access to parts of its network. Although Astral Foods said it responded 'swiftly,' the poultry division experienced around two days of downtime, disrupting processing and deliveries and leading to financial losses of around R20m. Broiler margins were described as 'extremely thin,' declining to -1.1% from 2.4% in the first half of fiscal 2024. However, broiler sales volumes rose by 4.4% to approximately 5.6 million birds per week. Looking ahead, Astral Foods warned of several challenges, including the ongoing threat of avian influenza and limited progress in approving vaccinations for breeding stock. The broader economic environment also presents headwinds, Astral Foods said. Weakening growth, reduced infrastructure investment and sluggish job creation in South Africa are expected to dampen consumer demand. Rising unemployment is further straining household spending, particularly on poultry products, the group added. On the global front, Astral Foods added uncertainties surrounding South Africa's trade benefits under the African Growth and Opportunity Act (AGOA) could disrupt export opportunities. "Rising feed costs and falling poultry prices hit Astral Foods' first-half earnings " was originally created and published by Just Food, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Sign in to access your portfolio
Yahoo
24-03-2025
- Business
- Yahoo
Astral Foods issues profit warning linked to cybersecurity incident
South African poultry producer Astral Foods has issued a profit warning, predicting a significant decline in its half-year profit due to multiple challenges, including a recent cybersecurity breach. The company disclosed that a cybersecurity incident on 16 March disrupted its poultry division, causing downtime in processing and delays in customer deliveries. Although the company responded 'swiftly,' the incident led to revenue losses. Combined with the costs of clearing a production backlog, it has impacted the group's profits by approximately R20m ($1.1m) in this reporting period, the company said. In its trading update, the company said it has 'reasonable certainty' that earnings per share (EPS) and headline earnings per share (HEPS) for the six-month period ending 31 March 2025 will decline by up to 55% and 60%, respectively. This translates to an EPS of 415 South African cents and HEPS of 354 cents, compared with the previous year's EPS of 923 cents and HEPS of 884 cents. Astral said that during its November 2024 year-end results presentation, it warned that declining chicken prices 'would continue to place severe pressure on broiler net margins'. The constrained consumer environment and extensive retail promotional activity on frozen chicken kept selling prices under pressure for the six months ending 31 March 2025. In addition, an increase in poultry feed input costs, following the drought of 2024 and higher local maize prices, contributed to lower earnings for the first half of 2025 compared to the results for the period ended 31 March 2024. Despite these challenges, Astral said its balance sheet 'remains strong,' supported by 'healthy cash generation'. It highlighted a continued focus on 'strengthening' its financial position and 'prudent' working capital management, maintaining a net cash position in the first half of financial year 2025 compared with a net debt position in first half of 2024. During the 12 months that ended in September 2024, Astral swung to a profit after tax of R753m from the annual loss of R512.2m in 2023. Astral reported revenue of R20.48bn, up 6.4% year-on-year. The poultry division contributed 82.6% of external revenue, while the feed division accounted for 17.4%. However, the company recorded an annual loss of R512.2m. Last month, Gary Arnold took over as CEO, succeeding Chris Schutte, who announced his retirement in 2024. Arnold has been with Astral for 28 years, serving as chief operating officer and an executive director since 2012. "Astral Foods issues profit warning linked to cybersecurity incident" was originally created and published by Just Food, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Sign in to access your portfolio
