South African poultry processor Astral Foods has issued a profit warning due to costs associated with Covid-19 and depressed chicken pricing.
The publicly-listed business said it expects headline earnings per share (EPS) to be down as much as 25% in the year ending 30 September, from the 1,659 South African cents (US$99.5) reported for the previous 12 months. It estimates EPS will come in around the 1,244 cents area.
Astral also predicts headline earnings per share (HEPS) will be lower by around the same magnitude from the 1,674 cents posted last year to about “at least” 1,255 cents.
Final annual results will be issued on 16 November.
The company produces fresh, frozen and value-added chicken products under brands such as Festive, County Fair and Mountain Valley.
Astral said in a stock-exchange filing: “The trading results for the year include costs to manage the risks associated with Covid-19 and ensure the safety of our staff. A complete shutdown in the quick-service restaurant sector during the hard lockdown saw more chicken being channelled to frozen production, resulting in higher stock levels of individually quick frozen portions in the poultry industry.
“This resulted in downward pressure on selling prices to the consumer market, which negatively affected the financial results for the 2020 financial year.”