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.
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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.
