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ARL
ARL
ARL - Astral Foods - Unaudited Interim Results and Dividend Declaration for the
Six Months Ended 31 March 2009
Astral Foods
Incorporated in the Republic of South Africa
Registration no 1978/003194/06
Share code: ARL
ISIN: ZAE000029757
Unaudited Interim Results and Dividend Declaration for the Six Months Ended 31
March 2009
Highlights
- Operating profit decrease 32%
- Earnings per share decrease 39%
- Interim dividend unchanged at 260 cps
Condensed Group Income Statement
Unaudited Unaudited Audited
six months six months 12 months
ended ended ended
31 March 31 March 30 Sept
2009 2008 Change 2008
R`000 R`000 % R`000
Revenue 4 462 220 3 769 363 18 8 184 205
Operating profit 279 018 407 582 (32) 547 786
(note 3)
Net finance costs (29 842) (17 535) (70) (49 401)
Profit before 249 176 390 047 (36) 498 385
income tax
Income tax (86 246) (123 349) (164 159)
expense
Profit for the 162 930 266 698 (39) 334 226
period
Attributable to:
Equity holders of 158 478 263 044 (40) 327 261
the parent company
Minority 4 452 3 654 22 6 965
interests
Profit for the 162 930 266 698 (39) 334 226
period
Earnings per share
(cents)
- basic 417 688 (39) 858
- diluted 416 687 (39) 858
Additional
information
Headline earnings 154 247 262 689 (41) 320 385
(R`000) (note 4)
Headline earnings
per share (cents)
- basic 405 687 (41) 840
- diluted 405 686 (41) 840
Dividend per share
(cents)
- declared out of 260 260 - 700
earnings for the
period
Ordinary shares
- Issued net of 38 047 708 38 027 508 38 047 708
treasury shares
- Weighted- 38 047 708 38 229 800 38 134 718
average
- Diluted 38 050 048 38 282 369 38 157 365
weighted-average
Net asset value per 33,27 34,76 (4) 34,24
share (Rand)
Condensed Group Balance Sheet
Assets
Non-current assets 1 638 906 1 507 326 1 614 525
Property, plant 1 490 459 1 352 573 1 462 364
and equipment
Intangible assets 10 011 13 884 12 251
Goodwill 124 802 123 548 124 802
Investments and 13 634 2 873 13 184
loans
Derivative - 9 102 -
financial
instruments
Deferred income - 5 346 1 924
tax assets
Current assets 1 481 192 1 394 031 1 542 689
Inventories 281 791 262 116 300 124
Biological assets 333 871 312 780 318 218
Trade and other 727 307 683 742 723 128
receivables
Current income 8 809 28 091 33 924
tax asset
Derivative 4 255 9 966 7 201
financial
instruments
Cash and cash 125 159 97 336 160 094
equivalents
Total assets 3 120 098 2 901 357 3 157 214
Equity and
liabilities
Capital and 1 265 905 1 321 999 1 302 887
reserves
attributable to
equity holders of
the parent company
Issued capital 736 421 736
Treasury shares (204 435) (201 646) (204 435)
Reserves 1 469 604 1 523 224 1 506 586
Minority 17 834 21 765 25 263
interests
Total equity 1 283 739 1 343 764 1 328 150
Non-current 425 537 350 716 390 223
liabilities
Borrowings 20 562 6 209 19 757
Deferred income 334 894 276 948 301 756
tax liability
Retirement 70 081 67 559 68 710
benefit obligations
Current liabilities 1 410 822 1 206 877 1 438 841
Trade and other 963 101 725 279 1 102 500
liabilities
Current income 14 920 20 644 9 471
tax liabilities
Borrowings 432 801 460 954 326 870
Total liabilities 1 836 359 1 557 593 1 829 064
Total equity and 3 120 098 2 901 357 3 157 214
liabilities
Net debt 328 204 369 827 186 533
(Borrowings less
cash and cash
equivalents)
Condensed Group
Cash Flow Statement
Cash operating 327 437 453 886 660 736
profit
Working capital (139 547) (174 365) 111 433
changes
Cash generated from 187 890 279 521 772 169
operating
activities
Income tax paid (20 997) (104 854) (133 138)
Cash flows from 166 893 174 667 639 031
operating
activities
Net cash used in (107 226) (132 496) (269 803)
investing
activities
Cash generated for 59 667 42 171 369 228
the period
Cash used in (202 503) (246 801) (382 249)
financing
activities
Interest paid (33 945) (17 535) (68 827)
Dividends to the (167 316) (167 888) (266 738)
company`s
shareholders
Payments to (1 592) (2 339) (2 331)
minority interest
holders
350 (33) 14 352
Increase/(decrease)
in borrowings
Proceeds from - 137 441
issuance of shares
Shares - (59 143) (59 146)
repurchased
Net decrease in (142 836) (204 630) (13 021)
cash and cash
equivalents
Effects of 1 515 (6 481) 3 512
exchange rate
changes
Cash and cash - - (2 621)
equivalents from
acquisition of
subsidiary
Cash and cash (162 171) (150 041) (150 041)
equivalent balances
at beginning of
year
Cash and cash (303 492) (361 152) (162 171)
equivalent balances
at end of period
Condensed Group Statement of Changes in Equity
Balance at 1 328 150 1 307 513 1 307 513
beginning of year
Profit for the 162 930 266 698 334 226
period
Movement in (11 543) (4 053) 8 789
currency
translation
difference during
the period
Dividends to the (167 410) (167 981) (266 905)
company`s
shareholders
Payments to (1 592) (2 339) (2 331)
minority interest
holders
Decrease in equity - (59 143) (59 146)
as result of share
repurchases
Shares issued - 137 441
Option value of 1 174 2 932 5 563
share options
granted
Cost of minority (27 970) - -
interest in a
subsidiary acquired
(note 5)
Balance at end of 1 283 739 1 343 764 1 328 150
period
Segment Information
Revenue
Animal Nutrition 2 689 154 2 193 819 23 5 138 064
- South Africa 2 525 789 2 058 723 23 4 825 052
- Other Africa 163 365 135 096 21 313 012
- Intergroup (890 150) (792 241) (1 774 073)
Poultry
- South Africa 2 899 518 2 562 308 13 5 099 284
and Swaziland
- Intergroup (236 302) (194 523) (279 070)
4 462 220 3 769 363 18 8 184 205
Operating profit
Animal Nutrition 141 799 224 498 (37) 384 922
- South Africa 129 872 201 583 (36) 339 052
- Other Africa 11 927 22 915 (48) 45 870
Poultry 137 219 183 084 (25) 162 864
279 018 407 582 (32) 547 786
Notes
1. Basis of preparation
This condensed interim financial statements for the six months ended 31 March
2009 have been prepared in accordance with IAS 34 - Interim Financial Reporting
and the Listing Requirements of the JSE Limited.
These financial statements have not been reviewed or audited by the group`s
auditors.
2. Accounting policies
The accounting policies applied in this interim financial statements comply with
IFRS and IAS 34 and are consistent with those applied in the preparation of the
group`s annual financial statements for the year ended 30 September 2008, except
for the early adoption of IAS 27(R) and IFRS 3(R). The effect on the group of
the adoption of IAS 27 (R) and IFRS 3(R) impacted on the recording of
transactions with minorities. The adoption had no effect on the reported profits
of the group, however the total equity was reduced by R18 million in respect of
the acquisition of a minority interest in a business unit.
Unaudited Unaudited Audited
six months six months 12 months
ended ended ended
31 March 31 March 30 Sept
2009 2008 2008
R`000 R`000 R`000
3. Operating profit
The following items have
been accounted for in the
operating profit:
Biological assets - fair (740) 1 203 1 231
value (loss)/gain
Amortisation of intangible 2 555 2 282 4 744
assets
Depreciation on property, 47 795 38 599 84 191
plant and equipment
Profit on disposal of 4 476 564 8 609
property, plant and
equipment
Foreign exchange loss 9 066 1 223 338
4. Reconciliation to
headline earnings
Earnings for the period 158 478 263 044 327 261
After tax profit on sale of (4 231) (355) (7 371)
property, plant and
equipment
Impairment of assets - - 495
Headline earnings for the 154 247 262 689 320 385
period
5. Minority interest acquired
The minority interest in Elite Breeding Farms was acquired during the period
under review. The total cost includes the cash amount paid, deferred tax and
settlement of amounts owed to Elite Breeding Farms. R10 million of the total
cost was debited against minority interest, and R18 million against reserves
attributable to equity holders of the parent company.
6. Capital commitments
Capital expenditure approved 46 351 109 572 84 856
not contracted
Capital expenditure 25 458 61 136 24 417
contracted not recognised in
financial statements
7. Contingent liabilities
A referral was made to the Competition Tribunal regarding alleged anti-
competitive conduct by Astral Operations Limited and Elite Breeding Farms during
2008. The group is opposing the referral.
Financial Overview
The group recorded a strong recovery in profit (R163 million) during this six
months compared to the immediately preceding six month period (R68 million).
However, the profit for the current period was 39% below the R267 million for
the first half of last year.
Revenue increased by 18% from R3 769 million to R4 462 million largely due to
the increase in agricultural input costs.
Operating profit at R279 million was 32% lower than last year`s R407 million:
Animal Nutrition down 37% and Poultry 25%. Operating margin dropped from 10,8%
to 6,3%.
Net finance costs of R30 million were up on the previous period`s R17 million.
Earnings per share down 39% from 688 cents to 417 cents.
Cash flows from operating activities of R167 million were only marginally lower
than the R175 million for the comparable period due to a lower increase in
working capital and a significantly lower tax payment resulting from the
expansion tax allowances.
Net debt of R328 million reduced by some R40 million with the net debt/equity
ratio reducing from 27,5% to 25,6%.
The Board has declared an unchanged interim dividend of 260 cents per share in
view of the group`s cash flow generating capabilities, strong balance sheet and
the prospect of improved trading conditions.
Operational Overview
Poultry Division
Gross revenue increased by 13% to R2 899 million (2008: R2 562 million) despite
a 7% drop in sales volumes following a decision to reduce the slaughter age of
birds due to the high feed costs. However, increases in selling prices were
insufficient to recover increases in feed costs, resulting in profit margins
coming under pressure. Operating profit fell by 25% from the comparable period`s
R183 million to R137 million.
Animal Nutrition Division
Gross revenue increased by 23% to R2 689 million (2008: R2 194 million). High
agricultural commodity input prices remained the main driving force behind the
increase with costs 20% higher than the comparable period. Due to the volatility
in the international markets towards the end of last year, the division took a
conservative view on the procurement of raw materials and as a result could not
immediately benefit from the fall in maize price. Volumes for the period were
down by 10% mainly due to the lower off take by the Poultry Division. The
Zambian profits were impacted by a foreign currency loss of R7,5 million due to
the weakening of the Zambian currency.
Operating profit of R142 million (R2008: R224 million) was down by 37% and
operating margins fell from 10,2% to 5,3% compared to the comparable period as a
result of the inability to pass on the full increase in raw material costs.
Changes in directorate
Nick Wentzel, chief executive officer of the group, resigned at the end of April
2009 and Chris Schutte, Managing Director of the Animal Feed Division, was
appointed as his successor. Chris joined Astral in 2002, after a successful
career in the poultry industry, and has led the Animal Feed Division very
effectively over the past seven years.
Three other executives have been appointed to the Board:
- Theo Delport, previously Chief Operating Officer of County Fair poultry
division and subsequently marketing director for Poultry, as Executive
Director of the Poultry Division;
- Daan Ferreira, Group Financial Manager since 2001, as Group Financial
Director; and
- Dr Obed Lukhele, previously Group Veterinary Manager, as Group Technical
Director.
Nick Wentzel has played a key role in driving Astral since its listing in 2001
to its present status as one of the leading food groups in South Africa. The
Board expresses its gratitude to him for his great achievement and for building
up a very strong team to take the group forward. Everyone at Astral wishes him
every success in the future.
Prospects
The significant decline in the price of agricultural commodities, specifically
maize, during recent months will have a positive impact on margins during the
second half of the year. Earnings for the full year are expected to exceed those
for last year.
The forecast financial information has not been reviewed and reported on by
Astral Foods` auditors.
Declaration of Ordinary Dividend No. 17
Notice is hereby given that dividend no.17 of 260 cents per ordinary share has
been declared in respect of the six months ended 31 March 2009.
Last date to trade cum dividend Thursday, 11 June 2009
Shares commence trading ex dividend Friday, 12 June 2009
Record date Friday, 19 June 2009
Payment of dividend Monday, 22 June 2009
Share certificates may not be dematerialised or rematerialised between Friday,
12 June 2009 and Friday, 19 June 2009, both days inclusive.
On behalf of the Board
J J Geldenhuys C E Schutte
Chairman Chief Executive Officer
Pretoria
13 May 2009
Registered office
Block 9, The Boardwalk Office Park
107 Haymeadow Crescent, Faerie Glen, Pretoria, 0043
Postnet 329, Private Bag X10, Elarduspark, 0048
Telephone: (012) 990-8260
Website address:
www.astralfoods.com
Directors
J J Geldenhuys (Chairman)
*C E Schutte (Chief Executive Officer)
*T Delport, *D D Ferreira (Financial Director)
*Dr O M Lukhele, M Macdonald, T C C Mampane,
Dr T Eloff, Dr N Tsengwa (*Executive director)
Company Secretary
M Eloff
Transfer secretaries
Computershare Investor Services (Pty) Limited
PO Box 61051
Marshalltown, 2107
Telephone: (011) 370-5000
Sponsor
JP Morgan Equities Limited
1 Fricker Road, Illovo
Johannesburg, 2196
Private Bag X9936
Sandton, 2146
Telephone: (011) 507-0430
Date: 13/05/2009 07:05:02 Produced by the JSE SENS Department.
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