South African poultry group Astral Foods has booked a 23% drop in full-year earnings on higher grain prices and greater competition from European and South American poultry importers.
Net income fell to ZAR392m (US$38m) in the year to end September, down from ZAR429m last year.
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“The poultry industry was put to the test on many fronts,” CEO Chris Schutte said. According to the company, earnings were hit by “record high” poultry imports, escalating grain prices and rising energy costs.
The group has taken a number of measures to reduce costs. In August, Astral laid off 150 people and in October the company put a freeze on pay for its 12,000 employees.
Astral’s sales jumped 12.9% in the year to ZAR8.16bn, thanks to higher sales in both the poultry and feed businesses.
Looking to the coming year, Astral said it did not expect the trading environment to improve in the first half, with rising feed costs pushing up costs and a depressed consumer environment that is “exacerbated by high levels of poultry imports and an imbalance in supply and demand”.
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