South African poultry group Astral Foods has warned that both headline earnings and earnings per share for the 12 months ending 30 September will be down between 50% and 70% compared to the previous year.

Astral confirmed in a trading statement issued yesterday (12 September) that tough trading conditions announced in July have continued to put pressure on the company.

The company, which expects to report its full-year results to 30 September in November, said it was advising shareholders of the earnings fall as “a reasonable degree of certainty” existed for the projection “based on the year-to-date results to the end of August 2016 and preliminary forecasts for the month of September 2016”.

“This implies that headline earnings per share for the 12 months ending 30 September 2016 is expected to be between 1,008 and 605 cents per share (2015: headline earnings per share 2,016 cents per share). Earnings per share for the twelve months to end September 2016 is expected to be between 1,006 and 604 cents per share (2015: earnings per share 2,013 cents per share),” Astral said.

Trading conditions experienced during the first half of the financial year, that resulted in a reduction in the reported profits for the six months ended 31 March, “continued into both the third quarter and fourth quarter of the financial year”, Astral said. The company said it alerted shareholders to those conditions in a general operational update published on 19 July.

In July, Astral said feed costs had continued to escalate following the impact of drought conditions on domestic maize crops – which the company said was expected to continue into 2017 “until projections of a better maize crop for the new 2016-2017 planting season materialise”.

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Meanwhile, over the same period, Astral said “there were also record levels of poultry imports which added to the existing surplus of poultry stock in the country”. “This, together with a consumer market that is under pressure, resulted in downward pressure on selling prices in order to sell the ongoing production of chicken.”