Annual profits have improved at South African poultry processor Quantum Foods despite a fall in sales.
For the year ended 30 September, headline earnings increased to ZAR126m (US$8.8m), up from ZAR26m a year earlier. Headline earnings per share grew to 54 cents from 11 cents.
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The firm made an operating profit of ZAR164m compared with a loss of ZAR21m. Last year’s results included impairment charges of ZAR49.5m.
However, sales fell 2.6% to ZAR3.5bn. Sales were particularly impacted by a fall in domestic revenue, mainly in the broiler segment, resulting from a “change in business model” at Quantum’s Western Cape operations.
Quantum said its cost of sales decreased by 4%. Cash operating expenses decreased further in 2015, following the closure of the Durbanville abattoir in the Western Cape. Various cost-saving initiatives, including the remodelling of the company’s distribution, also contributed positively.
Looking ahead, Quantum said: “The South African economy remains under pressure due to a weakening currency and muted consumer spending. While trading conditions were favourable for Quantum Foods during the 2015 financial year, we expect high input costs coupled with a weak economy to put pressure on the group’s profitability in 2016.
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By GlobalData“Due to the repositioning of the group, some of these risks have now been mitigated. This, together with various supply chain and cost-saving initiatives, the continued relentless focus on efficiencies and further growth prospects in the feeds, layer livestock and businesses on the African continent, should assist the group in navigating the anticipated headwinds successfully.”
