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ARL
ARL
ARL - Astral Foods - Audited Annual Financial Results and Dividend Declaration
for the Year Ended 30 September 2009
Astral Foods
Incorporated in the Republic of South Africa
Registration no 1978/003194/06
Share code: ARL
ISIN: ZAE000029757
AUDITED ANNUAL FINANCIAL RESULTS AND DIVIDEND DECLARATION FOR THE YEAR ENDED 30
SEPTEMBER 2009
Highlights
- Revenue increase 8%
- Operating profit increase 6%
- Earnings per share increase 6%
- Final dividend unchanged at 440 cents per share
CONDENSED GROUP INCOME STATEMENT
Audited Audited
Year ended Year ended
30 Sept 30 Sept
2009 Change 2008
R`000 % R`000
Revenue 8 833 638 8 8 184 205
Operating profit (note 4) 580 921 6 547 786
Net finance costs (50 158) 2 (49 401)
Profit before income tax 530 763 6 498 385
Income tax expense (177 771) (164 159)
Profit for the year 352 992 6 334 226
Attributable to:
Equity holders of the parent 344 564 5 327 261
company
Minority interests 8 428 21 6 965
Profit for the year 352 992 6 334 226
Earnings per share (cents)
- basic 906 6 858
- diluted 905 6 858
ADDITIONAL INFORMATION
Headline earnings (R`000) 338 492 6 320 385
Headline earnings per share
(cents)
- basic 890 6 840
- diluted 890 6 840
Dividend per share (cents)
- declared out of earnings for 700 700
the year
Ordinary shares
- Issued net of treasury 38 047 708 38 047 708
shares
- Weighted-average 38 047 708 38 134 718
- Diluted weighted-average 38 053 527 38 157 365
Net debt (borrowings less cash 187 396 186 533
and cash equivalents)
Net asset value per share 35,38 3 34,24
(Rand)
CONDENSED GROUP BALANCE SHEET
Audited Audited
Year ended Year ended
30 Sept 30 Sept
2009 2008
R`000 R`000
Assets
Non-current assets 1 650 167 1 614 525
Property, plant and equipment 1 504 338 1 462 364
Intangible assets 8 396 12 251
Goodwill 124 802 124 802
Investments and loans 11 973 13 184
Deferred income tax asset 658 1 924
Current assets 1 523 473 1 542 689
Inventories 329 775 300 124
Biological assets 357 130 318 218
Trade and other receivables 685 116 723 128
Current income tax assets 13 298 33 924
Derivative financial 309 7 201
instruments
Cash and cash equivalents 137 845 160 094
Total assets 3 173 640 3 157 214
Equity
Capital and reserves 1 346 044 1 302 887
attributable to equity holders
of the parent company
Issued capital 736 736
Treasury shares (204 435) (204 435)
Reserves 1 549 743 1 506 586
Minority interest in equity 20 405 25 263
Total equity 1 366 449 1 328 150
Liabilities
Non-current liabilities 471 856 390 223
Borrowings 29 057 19 757
Deferred income tax liability 365 801 301 756
Retirement benefit 76 998 68 710
obligations
Current liabilities 1 335 335 1 438 841
Trade and other liabilities 1 028 429 1 102 500
Current income tax 10 722 9 471
liabilities
Borrowings 296 184 326 870
Total liabilities 1 807 191 1 829 064
Total equity and liabilities 3 173 640 3 157 214
CONDENSED GROUP CASH FLOW STATEMENT
Audited Audited
Year ended Year ended
30 Sept 30 Sept
2009 2008
R`000 R`000
Cash operating profit 690 717 660 736
Working capital changes (106 474) 111 433
Cash generated from operating 584 243 772 169
activities
Income tax paid (91 359) (133 138)
Cash flows from operating 492 884 639 031
activities
Net cash used in investing (148 890) (269 803)
activities
Cash used in financing (322 572) (382 249)
activities
Net decrease/(increase) in cash 21 422 (13 021)
and cash equivalents
Effects of exchange rate (12 186) 3 512
changes
Cash and cash equivalent from - (2 621)
acquisition of subsidiary
Cash and cash equivalent (162 171) (150 041)
balances at beginning of year
Cash and cash equivalent (152 935) (162 171)
balances at end of year
CONDENSED GROUP SEGMENT INFORMATION
Audited Audited
Year ended Year ended
30 Sept 30 Sept
2009 Change 2008
R`000 % R`000
Revenue
Feed 5 122 202 5 138 064
- South Africa 4 850 002 1 4 825 052
- Other Africa 272 200 (13) 313 012
- Intergroup sales to (1 754 486) (1 774 073)
Poultry
Poultry 5 465 922 13 4 820 214
- South Africa and Swaziland 5 880 654 5 099 284
- Intersegment sales to (414 732) (279 070)
Poultry
8 833 638 8 8 184 205
Operating profit
Feed 299 314 (22) 384 922
- South Africa 282 406 (17) 339 052
- Other Africa 16 908 (63) 45 870
Poultry
- South Africa and Swaziland 281 607 73 162 864
580 921 6 547 786
Depreciation amortisation and
impairment
Feed 29 583 21 24 415
- South Africa 25 589 24 20 618
- Other Africa 3 994 5 3 797
Poultry
- South Africa and Swaziland 73 978 13 65 208
103 561 16 89 623
Assets
Feed 1 203 590 3 1 172 300
- South Africa 1 077 608 7 1 010 086
- Other Africa 125 982 (22) 162 214
Poultry
- South Africa and Swaziland 2 324 294 4 2 235 666
Intergroup (354 244) (250 752)
3 173 640 1 3 157 214
Liabilities
Feed 699 484 17 596 545
- South Africa 646 746 25 519 444
- Other Africa 52 738 (32) 77 101
Poultry
- South Africa and Swaziland 1 461 951 (1) 1 483 271
Intergroup (354 244) (250 752)
1 807 191 (1) 1 829 064
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
Audited Audited
Year ended Year ended
30 Sept 30 Sept
2009 2008
R`000 R`000
Balance beginning of year 1 328 150 1 307 513
Profit for the year 352 992 334 226
Movement in currency (22 107) 8 789
translation difference during
the year
Dividends to the company`s (266 334) (266 905)
shareholders
Payments to minority interest (1 592) (2 331)
holders
Decrease in equity as result - (59 146)
of share repurchases
Shares issued - 441
Option value of share options 3 525 5 563
granted
Acquisition of minority (28 185) -
interest
Balance at end of year 1 366 449 1 328 150
Notes
1. Basis of preparation
The condensed consolidated financial information announcement is based on the
audited financial statements of the group for the year ended 30 September 2009
which have been prepared in accordance with International Financial Reporting
Standards ("IFRS"), the Listings Requirements of the JSE Limited and the South
African Companies Act (1973), as amended.
2. Accounting policies
The accounting policies applied in these condensed consolidated financial
statements comply with IFRS and IAS 34 and are in agreement with those applied
in the preparation of the group`s annual financial statements for the year ended
30 September 2009, and consistent with those applied in previous years, 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 of the standards had no impact on the
reported profits of the group, however the effect on total equity was an
additional reduction of R18 million in respect of the acquisition of the
minority interest in a business unit.
3. Independent audit by the auditors
These condensed consolidated results have been audited by our auditors
PricewaterhouseCoopers Inc. who have performed their audit in accordance with
the International Standards on Auditing. A copy of their unqualified audit
report is available for inspection at the registered office of the company.
Audited Audited
Year ended Year ended
30 Sept 30 Sept
2009 2008
R`000 R`000
4. Operating profit
The following items have been
accounted for in the operating
profit:
Auditors` remuneration 4 877 4 455
Directors` remuneration 9 119 9 058
Cash settled share based (2 100) 2 439
payments - fair value
(gain)/loss
Equity call options - fair value 582 22 121
loss
Biological assets - fair value 2 581 1 231
gain
Amortisation of intangible 5 081 4 744
assets
Depreciation on property, plant 98 480 84 191
and equipment
Profit on disposal of property, 6 859 8 609
plant and equipment
Foreign exchange loss/(profit) 2 369 (338)
5. Reconciliation to headline
earnings
Earnings for the year 344 564 327 261
Profit on sale of property, (6 576) (7 371)
plant and equipment
Impairment of assets 504 495
Headline earnings for the year 338 492 320 385
6. Share capital
No shares were repurchased in terms of the share buy-back programme during the
year (2008: 450 000 shares at a total cost of R59 146 000).
No shares were issued in terms of the group`s share incentive scheme during the
period under review (2008: 37 916 shares).
7. Capital commitments
Capital expenditure approved not 93 956 84 856
contracted
Capital expenditure contracted 34 505 24 417
not recognised in financial
statements
8. Litigation
- A referral was made to the Competition Tribunal regarding alleged anti-
competitive conduct by Astral Operations Limited and Elite Breeding Farms. The
group is opposing the referral.
- During September 2009 the Competition Commission initiated complaints against
all past and present members of the Animal Feeds Manufacturers Association and
the South African Poultry Association as well as other players involved in the
production of poultry feed, in breeding stock and broiler production, and in the
poultry products industry. Astral is not aware of any transgressions of the
Competition Act within the group, however it offered all reasonable cooperation
to the Commission in regard to their investigation into the industry.
Financial Overview
Profit for the year increased by 6% to R353 million from last year`s R334
million.
The recovery in poultry profitability continued during the second half of the
year, however poultry margins are still not at levels experienced previously.
Feed cost was reduced on the back of lower commodity prices, but consumer
spending remained under pressure, depressing poultry volumes and realisations
especially during the last quarter of the financial year.
Revenue increased by 8% from R8,184 million to R8,834 million driven largely by
poultry, and operating profit was 6% higher at R581 million (2008: R548
million). While Poultry`s operating profit improved by 73%, Feed`s operating
profit was down 22%. The Group`s operating margin of 6,6% was marginally down on
last year`s 6,7%.
Net interest paid for the year of R50,2 million compares to last year`s R49,4
million.
Earnings per share increased by 6% from 858 cents to 906 cents.
Cash generated from operating activities for the year of R584 million was 24%
lower than the R772 million generated in 2008, mainly as result of higher
working capital.
Net debt remained on the same level as last year at R187 million representing a
debt to equity ratio of 13,7%.
A final dividend of 440 cents per share has been declared, resulting in a total
dividend for the year of 700 cents, the same as last year. The distribution will
be supported by our underlying cash flow and strong balance sheet.
Operational Overview
Poultry Division
Revenue for the Division increased by 13% to R5,5 billion (2008: R4,8 billion)
despite a 5% drop in sales volumes. With high input costs during the first half
of the year and depressed consumer spending during the second half of the year,
the average slaughter age of birds was reduced compared to the prior year to
adapt to market conditions. Increased selling prices offset by higher input
costs resulted in an increase in margins to 5,2% (2008: 3,4%). Operating profit
for the period increased by 73% to R282 million (2008: R163 million).
Feed Division
Revenue for the period of R5,1 billion was at a similar level to the previous
period. The revenue was impacted by higher sales prices offset by a volume
decrease of 8,0% when compared to the prior year. Volatile market conditions for
all grains together with a conservative approach, resulted in the group being
covered at higher prices during January to May 2009. Lower off take volumes
stretched the raw material position way into the second half of the period.
Lower input costs could only be passed on during the latter part of the period
to the Poultry Division and external customers. Operating profit of R299 million
decreased by 22% on the prior period (2008: R385 million) and operating margins
showed a similar trend with a decrease to 5,8% compared to 7,5% in 2008. The
division`s Zambian operation posted disappointing results due to a significant
contraction of that economy together with the substantial weakening of the
Zambian currency.
Prospects
Favourable trading conditions are expected for the first half of the 2010
financial year due to lower input costs as a result of a decline in agricultural
commodities together with an expected balance in poultry supply and demand.
Declaration of Ordinary Dividend No. 18
Notice is hereby given that a final dividend (no.18) of 440 cents per ordinary
share (excluding any witholding or dividend tax) has been declared in respect of
the year ended 30 September 2009.
Last date to trade cum dividend Friday, 8 January 2010
Shares commence trading ex dividend Monday, 11 January 2010
Record date Friday, 15 January 2010
Payment of dividend Monday, 18 January 2010
Share certificates may not be dematerialised or rematerialised between Monday,
11 January 2010 and Friday, 15 January 2010, both days inclusive.
On behalf of the board
JJ Geldenhuys CE Schutte
Chairman Chief Executive Officer
Pretoria
16 November 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
JJ Geldenhuys (Chairman)
*CE Schutte (Chief Executive Officer)
*T Delport
*DD Ferreira (Financial Director)
*Dr OM Lukhele
M Macdonald
TCC Mampane,
Dr T Eloff, Dr N Tsengwa
(*Executive director)
Company Secretary
MA Eloff
Transfer secretaries
Computershare Investor Services (Pty) Limited
PO Box 61051
Marshalltown, 2107
Telephone: (011) 370-5000
Sponsor
JP Morgan Chase Bank, N.A.(Johannesburg Branch)
1 Fricker Road, Illovo
Johannesburg, 2146
Private Bag X9936
Sandton, 2146
Telephone: (011) 507-0430
Date: 16/11/2009 07:05:10 Produced by the JSE SENS Department.
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