Astral's CEO discusses growth strategies and avian influenza challenges

Astral, the integrated poultry producer that lifted its 2025 dividend by 112% to 1 100 cents per share, plans to maintain a strong balance sheet due to the volatile environment, to fund a large pipeline of capital projects and to even possibly consider acquisitions, CEO Gary Arnold said.

Speaking in an online presentation on Monday, Arnold said the group staged a good financial recovery in the second half of its year to September 30, after earnings came under pressure in the first half. The group has been on a turnaround path since 2023, when its financial position was badly impacted by load shedding and avian influenza.

He said the group would reach volume production capacity at the end of this month and, “we have a good pipeline of strategic projects, with good returns.”

Apart from investments to build volumes, there were also projects to improve efficiencies. The group slaughtered an average of 5.8 million birds a week during its 2025 year, and investments in refrigeration should see this increase to 6.1 million by the end of November.

“Throughout the year, we focused on rebuilding the balance sheet and ended the financial year with over R1 billion in cash. This was supported by R1.7bn of cash generated from operations. As a result, a final dividend of 880 cents per share was declared,” said CFO Dries Ferreira.

Arnold said avian influenza outbreaks in many provinces continued to be a risk, with the latest case being reported at a smaller broiler producer in Hammarsdale, KwaZulu-Natal, last week. With insurance no longer being available and no compensation from government, their top defence was stringent biosecurity and vaccination.

He said some 5% of their breeding stock, all at one farm, had received approval for vaccination, while on Friday, two more farms received approval, which would take the percentage of vaccinated breeding stock to 30%, with more approvals being sought. The cost of the vaccinations was being covered by what the group used to pay for insurance.

In the past year, group revenue increased by 10.4% to R22.6bn. The Poultry Division contributed 82.5% (2024: 82.6%), and the Feed Division contributed 17.5% (17.4%) to total external revenue.

The increase was primarily due to increased broiler slaughter volumes and sales in the second half, as well as a recovery in selling price realisations following selling price deflation during the first half of the year.

The Feed Division was able to grow external customer volumes, and together with an increase in internal feed requirements, supported revenue growth in that division.

Operating profit came to R1.25bn compared to R1.12bn the previous year, an increase of 10.9%. Operating profit, excluding once-off insurance recoveries in 2024 of R251.6m, increased year-on-year by 42.8%.

Arnold said the increase was supported by sound cost management with assistance from higher production volumes, which reduced the overhead production cost per unit.

Revenue for the Feed Division increased by 9.8% to R10.8bn, as a result of higher sales volumes and an increase in feed selling prices due to higher raw material costs.

SAFEX yellow maize prices increased to an average of R4 552 per ton (R3 992) for the year. Soya meal prices fell to R7 507 per ton (R9 836). However, yellow maize prices fell in the second half and given a higher-than-expected crop and what was appearing to be a good planting season, he anticipated maize prices might remain favourable for the group in the period ahead.

Total feed sales increased by 7%, driven by an increase in the internal requirement for poultry feed at 8.1% (62 507 tons). External feed sales volumes increased by 5.6% (30 632 tons), mainly from higher demand in the external poultry and pig livestock sectors. The operating profit for this division increased by 31.1% to R713.8m.

“I am pleased to report we have been successful in executing our turnaround plans, which is evident in the good set of results and quality of earnings reported,” said Arnold.

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