Poultry producer Astral Foods has opted to hold on to its interim dividend as it braces for the economic fallout from the Covid-19 pandemic.
The group, which is an essential service as a food producer, said it is facing the prospect of higher input costs as global supply chains are disrupted, while problems in SA, such as load-shedding, increased costs in its six months to end-March.
“In the medium to long term the poultry industry will not escape the impact of an even weaker economy brought about by the lockdown, and the subsequent impact this has had on the ability of South Africans to earn a living wage,” the group said.
Astral said profit in its six months to end-March was largely flat, with headline earnings up marginally to R369m. Headline earnings is a widely used profit measure in SA, stripping out one-off items to give a better indication of the underlying performance of a business.
The group said higher sales in its broiler operation were partially offset by higher feed costs, as well as other hard-to-control costs.
“The legislated minimum wage, the impact of load-shedding nationally, ongoing additional water supply costs in Standerton, and costs associated with Covid-19 all contributed to a higher base cost of production during the period under review,” the group said.
The group had paid an interim dividend of R4.75 per share previously, and has 43-million shares in issue.