new annual results presentation - astral foods · 2020. 2. 4. · revenue profit before interest...
TRANSCRIPT
Annual Results Presentation
for the 12 months ended 30 September 2018
2
“
”
AGENDA
Business Overview Page 3 / Slide 3
Operational Overview Page 5 / Slide 8
Industry Trends Page 12 / Slide 21
Financial Overview Page 16 / Slide 29
Outlook Page 22 / Slide 42
Additional Information Page 24 / Slide 46
BUSINESS OVERVIEW
HIGHLIGHTS
Business
Overview
Operational
Overview Industry Trends
Financial
Overview Outlook
4
A majority of the key drivers of profitability were in Astral’s favour
– “stars were aligned”
Feed input costs reduced notably due to lower maize prices on
the back of a bumper maize crop for 2017
Supply and demand balance during the year gave pricing
support
Further improvements in on-farm poultry production efficiencies
were achieved
No further incidents of bird flu and related costs were
experienced during the period under review
Contribution to profitability from an improved performance across
all business units
Revenue
Profit before interest and tax
Earnings per share @ 3 691 cps
Headline earnings per share @ 3 712 cps
Total dividend for the year @ 2 050 cps
94%
88%
79%
5%
KEY FINANCIAL INDICATORS
Business
Overview
Operational
Overview Industry Trends
Financial
Overview Outlook
5
94%
6
DIVISIONAL HIGHLIGHTS
Business
Overview
Operational
Overview Industry Trends
Financial
Overview Outlook
Poultry
Feeding cost decreased
Bird performance improvement
Sales volumes flat
Sales realisations up
No impact from HPAI (bird flu)
Feed
Maize prices notably down
General market improvement
Higher internal feed required
External sales volumes up
Rand per ton margin up
Other Africa
Higher profits – improved performance from Mozambique and Swaziland
6
465
116 18
519
93
1 087
1 942
356
-
500
1 000
1 500
2 000
2 500P
BIT
F20
17
Raw
mate
rial
co
st
Feed
co
nve
rsio
ne
ffic
ien
cy
Bro
ile
r s
ale
sv
olu
me
s
Bro
ile
r s
ellin
gp
ric
e
Bir
d f
lu c
os
t2017 Oth
er
PB
IT F
20
18
THE YEAR IN PERSPECTIVE
Business
Overview
Operational
Overview Industry Trends
Financial
Overview Outlook
7
(R million)
R855 million
“
”
8
9
POULTRY DIVISION
Business
Overview
Operational
Overview Industry Trends
Financial
Overview Outlook
Operating profit - R million
Operating profit up 127.7%
• Feed price down 4.0%
• Selling price contribution
• Net margin 13.7% F2017: 6.4%
Revenue - R million
Revenue up 6.9%
• Broiler sales volumes up 0.2%
• Broiler sales realisations up 7.1%
9 916 10 604
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
10 000
11 000
F2017 F2018
638
1 453
-
100
200
300
400
500
600
700
800
900
1 000
1 100
1 200
1 300
1 400
1 500
F2017 F2018
10
POULTRY DIVISION
Business
Overview
Operational
Overview Industry Trends
Financial
Overview Outlook
Results for the year ended September 2018 are a significant improvement
on the comparable period
Feed input costs reduced due to lower maize prices on the back of a record
maize crop for 2017 and an above average crop for 2018
Supply and demand balance gave pricing support in the first half of the
reporting period, whilst the second half reflected a weaker market and softer
selling prices
Imports during the period were higher than the comparable period,
averaging 48 305 tons (≈ 8,6 million birds per week)
Further improvements in on-farm poultry production efficiencies,
benefitting broiler live cost through an improved feed conversion efficiency
No further incidents of bird flu and related costs were experienced during
the period
11
POULTRY DIVISION – PRODUCT MIX
Business
Overview
Operational
Overview Industry Trends
Financial
Overview Outlook
49%
3%
4% 14%
7%
23%
F2018
437 506 Tons Volume increase ≈ 0,2%
49%
4%
4%
14%
7%
22%
F2017
436 695 Tons
12
BROILER PRODUCTION PERFORMANCE
Business
Overview
Operational
Overview Industry Trends
Financial
Overview Outlook
92%
94%
96%
98%
100%
102%
104%
106%
108%
F2013 F2014 F2015 F2016 F2017 F2018
Slaughter age Live weight Average daily gain
Key indicators base-lined to 100% in F2013
BROILER PRODUCTION PERFORMANCE
Business
Overview
Operational
Overview Industry Trends
Financial
Overview Outlook
65%
70%
75%
80%
85%
90%
95%
100%
105%
110%
115%
120%
125%
130%
F2013 F2014 F2015 F2016 F2017 F2018
Mortality rate Feed conversion rate Efficiency factor (PEF)
Key indicators base-lined to 100% in F2013
13
BROILER PRODUCTION PERFORMANCE
Business
Overview
Operational
Overview Industry Trends
Financial
Overview Outlook
85%
90%
95%
100%
105%
110%
115%
120%
125%
F2013 F2014 F2015 F2016 F2017 F2018
Broiler feed price index Feed conversion index Feeding cost index
Key indicators base-lined to 100% in F2013
14
“
”
15
FEED DIVISION
Business
Overview
Operational
Overview Industry Trends
Financial
Overview Outlook
Operating profit - R million
Operating profit up 16.7%
• Net margin 7.4% F2017: 5.9%
• Improved trading conditions
Revenue - R million
Revenue down 5.8%
• Raw material costs down
• Average selling prices down 11.2%
• Sales volumes up 6.1%
6 583 6 198
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
F2017 F2018
391
457
-
100
200
300
400
500
F2017 F2018
16
FEED DIVISION
Business
Overview
Operational
Overview Industry Trends
Financial
Overview Outlook
SAFEX yellow maize prices decreased notably for the period under review
F2018 avg. R2 098 per ton (F2017: R2 464) down R366 per ton year-on-year
Internal feed sales increased by 6.0% due to an increase in broiler
production numbers in F2018
External feed sales increased by 6.1% as all livestock sectors benefitted
from lower feed costs
Expense increases were contained to 4.7% year-on-year across all seven
feed mills
The average net margin increased (on a Rand per ton basis) for the period
under review
17
FEED DIVISION – SALES MIX
Business
Overview
Operational
Overview Industry Trends
Financial
Overview Outlook
60%
6%
21%
13%
60%
6%
22%
12%
F2017
1 329 771 Tons
F2018
1 410 283 Tons Volume increase ≈ 6.1%
18
“
”
19
OTHER AFRICA DIVISION (Zambia, Mozambique & Swaziland)
Business
Overview
Operational
Overview Industry Trends
Financial
Overview Outlook
20
Operating profit - R million
Operating profit up 20.2%
• Net margin 7.8% F2017: 6.3%
• Mozambique & Swaziland
improved performance
Revenue - R million
Revenue down 3.7%
• Raw material costs down
• Sales volumes up 4.0%
• Average selling prices down 7.4%
427 411
-
50
100
150
200
250
300
350
400
450
F2017 F2018
27
32
-
5
10
15
20
25
30
35
F2017 F2018
INDUSTRY TRENDS
SAFEX YELLOW MAIZE PRICE
Business
Overview
Operational
Overview Industry Trends
Financial
Overview Outlook
22
Source: CJA Strategic Risk Brokers
SAFEX YELLOW MAIZE PRICE vs. CBOT IN RAND TERMS
23
Business
Overview
Operational
Overview Industry Trends
Financial
Overview Outlook
Source: CJA Strategic Risk Brokers
DURBAN SOYA MEAL PRICE
24
Business
Overview
Operational
Overview Industry Trends
Financial
Overview Outlook
Source: CJA Strategic Risk Brokers
POULTRY IMPORTS PER MONTH
25
0
5 000
10 000
15 000
20 000
25 000
30 000
35 000
40 000
45 000
50 000
55 000
60 000
65 000
70 000
Oct-
13
Dec-1
3
Fe
b-1
4
Ap
r-14
Ju
n-1
4
Au
g-1
4
Oct-
14
Dec-1
4
Fe
b-1
5
Ap
r-15
Ju
n-1
5
Au
g-1
5
Oct-
15
Dec-1
5
Fe
b-1
6
Ap
r-16
Ju
n-1
6
Au
g-1
6
Oct-
16
Dec-1
6
Fe
b-1
7
Ap
r-17
Ju
n-1
7
Au
g-1
7
Oct-
17
Dec-1
7
Fe
b-1
8
Ap
r-18
Ju
n-1
8
Au
g-1
8
Total poultry imports 6 per. Mov. Avg. (Total poultry imports)
Tons
Business
Overview
Operational
Overview Industry Trends
Financial
Overview Outlook
Source: SAPA
BROILER SELLING PRICES
26
Business
Overview
Operational
Overview Industry Trends
Financial
Overview Outlook
Source: Own Data
80%
90%
100%
110%
120%
130%
140%
150%
160%
Oct-
12
Dec-1
2
Fe
b-1
3
Ap
r-13
Ju
n-1
3
Au
g-1
3
Oct-
13
Dec-1
3
Fe
b-1
4
Ap
r-14
Ju
n-1
4
Au
g-1
4
Oct-
14
Dec-1
4
Fe
b-1
5
Ap
r-15
Ju
n-1
5
Au
g-1
5
Oct-
15
Dec-1
5
Fe
b-1
6
Ap
r-16
Ju
n-1
6
Au
g-1
6
Oct-
16
Dec-1
6
Fe
b-1
7
Ap
r-17
Ju
n-1
7
Au
g-1
7
Oct-
17
De
c-1
7
Fe
b-1
8
Ap
r-18
Ju
n-1
8
Au
g-1
8
Broiler selling price index Six month average
BROILER PRICE vs. FOOD PRICE INFLATION
27
Business
Overview
Operational
Overview Industry Trends
Financial
Overview Outlook
80%
90%
100%
110%
120%
130%
140%
150%
160%
170%
80%
90%
100%
110%
120%
130%
140%
150%
160%
170%
Oct-
12
Dec-1
2
Fe
b-1
3
Ap
r-13
Ju
n-1
3
Au
g-1
3
Oct-
13
Dec-1
3
Fe
b-1
4
Ap
r-14
Ju
n-1
4
Au
g-1
4
Oct-
14
Dec-1
4
Fe
b-1
5
Ap
r-15
Ju
n-1
5
Au
g-1
5
Oct-
15
Dec-1
5
Fe
b-1
6
Ap
r-16
Ju
n-1
6
Au
g-1
6
Oct-
16
Dec-1
6
Fe
b-1
7
Ap
r-17
Ju
n-1
7
Au
g-1
7
Oct-
17
Dec-1
7
Fe
b-1
8
Ap
r-18
Ju
n-1
8
Au
g-1
8
Broiler selling price index SA food price index
Source: Own Data
-30%
-20%
-10%
0%
10%
20%
30%
40%
Oc
t-1
2
De
c-1
2
Feb
-13
Ap
r-1
3
Ju
n-1
3
Au
g-1
3
Oc
t-1
3
De
c-1
3
Feb
-14
Ap
r-1
4
Ju
n-1
4
Au
g-1
4
Oc
t-1
4
De
c-1
4
Feb
-15
Ap
r-1
5
Ju
n-1
5
Au
g-1
5
Oc
t-1
5
De
c-1
5
Feb
-16
Ap
r-1
6
Ju
n-1
6
Au
g-1
6
Oc
t-1
6
De
c-1
6
Feb
-17
Ap
r-1
7
Ju
n-1
7
Au
g-1
7
Oc
t-1
7
De
c-1
7
Feb
-18
Ap
r-1
8
Ju
n-1
8
Au
g-1
8
% Change in broiler feed price % Change in poultry selling price
CHANGE IN POULTRY SELLING PRICE vs. FEED PRICE
28
Business
Overview
Operational
Overview Industry Trends
Financial
Overview Outlook
Source: Own Data
FINANCIAL OVERVIEW
INCOME STATEMENT
30
Business
Overview
Operational
Overview Industry Trends
Financial
Overview Outlook
Year ended 30 September
2018
R million
2017
R million
Restated
2017
R million
Revenue 12 979 12 417 12 351
Operating profit 1 942 1 056 1 048
Operating profit margin 15.0% 8.5% 8.5%
Profit on sale of investment - 31 31
Profit before interest and tax 1 942 1 087 1 079
PBIT margin 15.0% 8.7% 8.7%
Net finance income / (cost) 52 (15) (15)
Profit before tax 1 994 1 072 1 064
Tax (560) (311) (309)
Profit for the period 1 434 761 755
Headline earnings 1 439 741 735
EPS – Cents 3 691 1 963 1 948
HEPS – Cents 3 712 1 914 1 899
5%
84%
86%
89%
88%
94%
% change
79%
1,3 1,7 2,2 2,3 3,3 3,6
4,4 4,6 5,1 5,0 5,3 5,8 6,0 7,0
8,7 9,1 9,9
10,6
2,0 2,7
2,7 2,7
2,5 2,7 3,5 5,1
4,0 3,6 3,5 4,3 4,9
5,5
6,2 7,2
6,6 6,2
2,8
3,7 3,9 4,1
4,8 5,2
6,3 6,9
7,4 7,0 7,2
8,2 8,5
9,6
11,3 12,0
12,4 13,0
0,000
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Poultry Feed Other Africa External revenue
GROUP ANNUAL REVENUE
31
Business
Overview
Operational
Overview Industry Trends
Financial
Overview Outlook
(R billion)
124 90 174 238 383 494 476 163 282 262 353 137
-112
104 661 59
638 1453
79 130 153
151
214
272 333
385
261 281
282
289
329
354
423
485
391
457
203 220
328 389
597
766 809
548 581 585
674
477
262
493
1101
549
1086
1942
7,3%
5,9%
8,3%
9,6%
12,3%
14,8%
12,8%
6,7% 6,6%
8,4%
9,3%
5,8%
3,1%
5,1%
9,8%
4,6%
8,7%
15,0%
0
0,02
0,04
0,06
0,08
0,1
0,12
0,14
0,16
-120
380
880
1380
1880
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Poultry Feed Other Africa Profit on Sale of Investment
GROUP ANNUAL OPERATING PROFIT
32
(R million)
Business
Overview
Operational
Overview Industry Trends
Financial
Overview Outlook
140
-3 -117 5
45 59 351 310 194
-135 22
616 836 617
154
135 156 173 157 197
186 237
233
252 184
207
191
266
324
153 59
203 213 280
550 551
429
120 212
875
1044
898
1H12 2H12 1H13 2H13 1H14 2H14 1H15 2H15 1H16 2H16 1H17 2H17 1H18 2H18
Poultry Feed Other Africa Change in feed price Change in broiler selling price
GROUP SIX MONTHLY OPERATING PROFIT
33
Business
Overview
Operational
Overview Industry Trends
Financial
Overview Outlook
(R million)
September 2018
R million
September 2017
R million
Restated
% change
Non-current assets 2 409 2 228
Net working capital 1 189 869
Current assets (excl. cash) 2 943 2 468
Current liabilities (excl. borrowings) (1 754) (1 599)
Non-current liabilities (excl. borrowings) (650) (610)
Net assets 2 948 2 487
Net (surplus cash) (789) (552)
Equity 3 737 3 039
Total 2 948 2 487
BALANCE SHEET
34
Business
Overview
Operational
Overview Industry Trends
Financial
Overview Outlook
37%
19%
10%
7%
19%
19%
23%
8%
42%
CAPITAL EXPENDITURE
35
Business
Overview
Operational
Overview Industry Trends
Financial
Overview Outlook
Twelve months ended 30 September 2018
R million
2017
R million
Depreciation 152 149
Total capex spend 356 150
Commitments 1 401 148
Total spend and committed 1 757 298
CAPITAL EXPENDITURE F2018
36
Business
Overview
Operational
Overview Industry Trends
Financial
Overview Outlook
2018
R million
Processing plant equipment 113
Breeder farm refurbishment 22
Water augmentation project Western Cape 16
HPAI mitigation project 42
Listeria mitigation project 17
Sub-Total 210
Other: normal on-going capex 146
Total capex spend F2018 356
CAPITAL EXPENDITURE COMMITMENTS
37
Business
Overview
Operational
Overview Industry Trends
Financial
Overview Outlook
R million
Total commitments 1 401
Major projects: 1 271
Festive expansion (Phase 1 & 2 – 800 000 bpw) 875
Mountain Valley expansion (200 000 bpw) 203
Meadow Feeds Standerton silo complex 53
New feed mill Zambia 140
WORKING CAPITAL
38
Business
Overview
Operational
Overview Industry Trends
Financial
Overview Outlook
For the twelve months ended 30 September 2018
R million
2017
R million
Variance
R million
Current assets 2 943 2 468 475
Biological assets 770 658 112
Inventory - Poultry 532 258 274
- Feed 255 185 70
- Other Africa 50 50 -
Trade receivables 1 204 1114 90
Receivables – investment sold 16 56 (40)
Other receivables 116 147 (31)
Current liabilities (1 754) (1 599) (155)
Trade payables (1 324) (1 151) (173)
Other payables (430) (448) (18)
Net working capital 1 190 869 321
STATEMENT OF CASH FLOWS
39
Business
Overview
Operational
Overview Industry Trends
Financial
Overview Outlook
For the twelve months ended 30 September 2018
R million
2017
R million
Cash operating profit 2 156 1 436
Working capital movement (425) (71)
1 731 1 365
Tax paid (516) (310)
Net interest received / (paid) 58 (11)
Capital expenditure (358) (180)
915 864
Dividends paid (729) (108)
Government grant received - 29
Other cash flow items 45 7
Loans (repaid) - (35)
Movement in cash equivalents 231 757
Effect of exchange rate changes 6 -
Opening balance 552 (205)
Closing balance 789 552
272 326 487
631
958
1286 1381
840 890 960 1148
787
434
864
2016
965
1914
3712
90 108 168 230 380 585 700 700 700 760 810 656 222 440 1150 490 1055 2050
F2
00
1
F2
00
2
F2
00
3
F2
00
4
F2
00
5
F2
00
6
F2
00
7
F2
00
8
F2
00
9
F2
01
0
F2
01
1
F2
01
2
F2
01
3
F2
01
4
F2
01
5
F2
01
6
F2
01
7
F2
01
8
Headline earnings per share Dividend per share
HEADLINE EARNINGS & DIVIDEND PER SHARE
40
Business
Overview
Operational
Overview Industry Trends
Financial
Overview Outlook
(cents per share)
Record profits in F2018 with profit margin at 15.0% (F2017: 8.7%)
Cash flow generated from operations R1 731 million in F2018
Net surplus cash at year-end of R789 million
Final dividend of 1 050 cps within the Group’s liquidity capability
Full year dividend of 2 050 cps at 1.8 times cover (up 94%)
IN SUMMARY
41
Business
Overview
Operational
Overview Industry Trends
Financial
Overview Outlook
OUTLOOK
Raw material prices are on an upward trend and will impact Astral‟s
largest input cost, namely feed making up 67% of broiler live cost
The impact of international trade wars and geopolitics on key input
costs, including coarse grains and fuel
The negative impact of high fuel prices on consumer disposable
income and continued pressure on poultry selling prices
The impact of the new minimum wage will increase production costs
however could lead to higher levels of consumer discretionary spend
High levels of poultry imports from Brazil and the USA, expected to
continue
The on-going risk of bird flu, however prevention strategies to manage
this threat are in place, albeit at additional associated costs
Policy uncertainty around land expropriation without compensation
and the impact on property rights and capital investment
43
Business
Overview
Operational
Overview Industry Trends
Financial
Overview Outlook
POTENTIAL NEGATIVE INFLUENCES
Improved political situation in South Africa and the region
Indications of a more “business friendly” environment in South Africa,
with key government departments engaging with the poultry industry
The European Partnership Agreement (EPA) safeguard duty finally
imposed on poultry imports into South Africa from the EU
Progressive genetic improvement of the Ross broiler breed will
continue to support the group‟s best cost strategy
Sufficient international and local coarse grain stocks
Expansion in Astral‟s poultry processing capacity (up 20%) over the
next three years (capex of R1.1 billion) supports the President‟s
investment drive and stimulus plan announced during the year
44
Business
Overview
Operational
Overview Industry Trends
Financial
Overview Outlook
POTENTIAL POSITIVE INFLUENCES
“
”
45
ADDITIONAL INFORMATION
WHAT WE SAID IN MAY 2018
47
General business confidence improved as well as the prospect
for foreign direct investment following the election of a new
President for the country
A bumper maize crop in 2017 and the country set to harvest an
above average maize crop in 2018 will stand us in good stead
over the next period from a feed input cost point of view
Further unlocking the inherent genetic potential of the Ross
broiler breed through optimised broiler nutrition therefore
cementing Astral‟s best cost strategy
Higher level of competitiveness as producers have expanded
broiler production numbers, and the pork industry has been
forced to sell product at lower prices following the listeria
outbreak
Continued high levels of poultry imports especially from the
United States of America and Brazil, equivalent to over 40% of
local poultry production
HPAI remains a threat and major concern for the poultry
industry with the upcoming winter season
?
KEY FINANCIAL RATIOS
48
37 36
48 48
51
65
55
31 31
30
34
23
12
20
41
19
36
61
31 33
39 39
46
49
45
25 26 26
29
21
13
19
36
28
42
8,9
7,5
10,0
11,4
13,9
16,5
14,5
9,3 9,9
11,0
7,4 6,5
11,1
9,9
16,1
7,3 8,3
9,6
12,3
14,8
12,8
8,0 7,8 8,4
9,3
5,8 5,1
9,8
4,6
8,7
15,0
5,5 5,5 6,1
4,7 4,1 4,4 4,3 4,7 4,8
3,6 3,7 4,0 3,8 3,9 4,2 4,1 4,1 4,1
-
5,0
10,0
15,0
20,0
25,0
30,0
0
10
20
30
40
50
60
70S
ep
-01
Sep
-02
Sep
-03
Sep
-04
Sep
-05
Sep
-06
Sep
-07
Sep
-08
Sep
-09
Sep
-10
Sep
-11
Sep
-12
Sep
-13
Sep
-14
Sep
-15
Sep
-16
Sep
-17
Sep
-18
RONA ROE EBITDA margin PBIT margin Asset turn
KEY FINANCIAL INDICATORS
49
8,53 10,79
14,34 17,36
23,83
28,28
33,47 34,24 35,38 37,43
41,36 41,65 44,16
49,95
61,05 61,07
78,15
96,06
23 20
21
29
17
9
19
12
15
11 10
16
21 18
24
34
24
34
26
22 21
12
14
14
9
3
7
15
9
2
10 0 0
0
10
20
30
40
50
60
70
80
90
100S
ep
-01
Sep
-02
Sep
-03
Sep
-04
Sep
-05
Sep
-06
Sep
-07
Sep
-08
Sep
-09
Sep
-10
Sep
-11
Sep
-12
Sep
-13
Sep
-14
Sep
-15
Sep
-16
Sep
-17
Sep
-18
NAV share Working capital days Net Debt / Equity
12,30%
14,81%
19,82%
25,00%
27,80%
28,73%
27,61%
23,85%
19,86%
10%
15%
20%
25%
30%
0
25
50
75
100
125
150
175
200
225
250
275
300
325
350
375
2012 2013 2014 2015 2016 2017 2018 2019E 2020F
End Stock Maize stock to use ratio
WORLD CORN ENDING STOCKS
50
Million Tons
Source: CJA Strategic Risk Brokers
SOUTH AFRICA – TOTAL MAIZE SUPPLY & DEMAND
51
2013/14 2014/15 2015/16 2016/17 2017/18 2018/19E 2019/20F
Actual Actual Actual Actual Estimate Estimate Forecast
Carry In (1 May) 1 414 589 2 074 2 471 1 093 3 689 2 326
Crop Estimate 11 811 14 250 9 955 7 779 16 744 12 931 12 347
Retentions 433 163 309 837 932 890
Sagis Delivery 11 072 13 817 9 794 7 469 15 907 11 999 11 457
Minus early deliveries 0 0 0 450 0 0 0
Imports 80 65 1 964 2 237 0 0 0
Total Supply 12 566 14 471 13 831 11 727 17 000 15 688 13 783
Domestic Usage Food 4 583 4 840 4 698 4 808 4 872 5 145 5 063
Domestic Usage Feed 4 715 5 041 5 520 5 004 5 399 5 308 5 435
Gristing, withdrawn & released 480 376 293 278 358 281 314
Total Domestic Usage 9 777 10 257 10 512 10 090 10 630 10 734 10 812
Exports & Sundries 2 122 2 153 848 993 2 925 2 628 1 814
Plus early deliveries 0 0 0 450 0 0 0
Carry Out (30 Apr) 590 2 062 2 471 1 093 3 446 2 326 1 156
No of days usage 25 73 86 40 118 79 39
STU 4,96% 16,62% 21,75% 9,87% 25,42% 17,41% 9,16%
Marketing year (May to April)
'000 tons
Source: CJA Strategic Risk Brokers
1414 590 2062 2471 1093 3689 2326 1156
12,23%
4,96%
16,62%
21,75%
9,87%
28,31%
17,41%
9,16%
0%
5%
10%
15%
20%
25%
30%
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19E 2019/20F
Carry out Maize stock to use ratio
SOUTH AFRICA – TOTAL MAIZE SUPPLY & DEMAND
52
„000 Tons
Source: CJA Strategic Risk Brokers
EL NIÑO SOUTHERN OSCILLATION - FORECAST
53 Source: International Research Institute for Climate and Society (IRI) – Columbia University
SOUTHERN AFRICA - VEGETATIVE HEALTH INDEX
54
VHI of previous year VHI of current year
Source: NOAA - National Environmental Satellite, Data, and Information Service (VHI)
BROILER FEED – INGREDIENT INCLUSION & COST CONTRIBUTION
55
65,0 45,7 63,3 43,6 61,4 39,6 61,1 38,0 55,6 29,8 54,3 26,7
11,4
14,9
15,6
20,3
16,8
22,3
14,0
18,6
14,0
17,9
13,2
17,9
9,1
8,6
6,4
5,6
6,9
5,4
6,2
4,0
6,1
3,3
5,7
4,1
6,4
14,9
6,7
14,0
7,3
17,2
7,8
18,8
8,6
21,5
9,1
21,3
0,2
0,9
0,4
1,2
0,5
1,7 0,4
1,5 0,5
1,7
0,7
2,3
7,5
10,3
7,3
10,3
6,6
9,1 9,9
13,8
14,6
19,8
16,6
22,2
0,3
4,7
0,3 5,0
0,4 4,7
0,5
5,4
0,5
6,0
0,4
5,4
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1H16Incl.
1H16Contr.
2H16Incl.
2H16Contr.
1H17Incl.
1H17Contr.
2H17Incl.
2H17Contr.
1H18Incl.
1H18Contr.
2H18Incl.
2H18Contr.
Maize Soybean MealSunflower Meal OtherFish Meal F/Fat and Extr SoyVitamins, Minerals and Medication.
Source: Own Data
BRAZIL, EU & USA PRODUCT COST BENCHMARK
56
Ex BRAZIL – December 2018
FROZEN LEG QUARTERS BULK PACKED
CIF DBN US$ per ton TON 1 050.00 1 050.00 1 050.00 SA COST
R/$ exchange rate R$ 14.20 14.40 14.60
Rand per ton TON 14 910.00 15 120.00 15 330.00 21 100.00
Rand per kg KG 14.91 15.12 15.33 21.10
Duty per kg KG 37% 37% 37% -
Clearance costs KG 0.65 0.65 0.65 -
COST INTO STORAGE KG 21.08 21.36 21.65 21.10
Storage KG 0.50 0.50 0.50 -
Distribution KG 0.80 0.80 0.80 0.92
Marketing, Administration, Finance KG 0.80 0.80 0.80 0.96
TOTAL COST KG 23.18 23.46 23.75 22.98
EUROPE – December 2018
FROZEN LEG QUARTERS BULK PACKED
CIF DBN € per ton TON SA COST
€ exchange rate R$
Rand per ton TON 21 100.00
Rand per kg KG 21.10
Duty per kg KG -
Clearance costs KG -
COST INTO STORAGE KG 21.10
Storage KG -
Distribution KG 0.92
Marketing, Administration, Finance KG 0.96
TOTAL COST KG 22.98
Source: Own Estimates
BRAZIL, EU & USA PRODUCT COST BENCHMARK
57
EUROPE Ex Belgium, Ireland, Spain, Poland with Safeguard Duty @ 35,3% – December 2018
FROZEN LEG QUARTERS BULK PACKED
CIF DBN € per ton TON 900.00 900.00 900.00 SA COST
R/€ exchange rate R$ 16.20 16.40 16.60
Rand per ton TON 14 580.00 14 760.00 14 940.00 21 100.00
Rand per kg KG 14.58 14.76 14.94 21.10
Duty per kg KG 35.3% 35.3% 35.3% -
Clearance costs KG 0.65 0.65 0.65 -
COST INTO STORAGE KG 20.38 20.62 20.86 21.10
Storage KG 0.50 0.50 0.50 -
Distribution KG 0.80 0.80 0.80 0.92
Marketing, Administration, Finance KG 0.80 0.80 0.80 0.96
TOTAL COST KG 22.48 22.72 22.96 22.98
Ex USA – December 2018
FROZEN LEG QUARTERS BULK PACKED
CIF DBN US$ per ton TON 650.00 650.00 650.00 SA COST
R/$ exchange rate R$ 14.20 14.40 14.60
Rand per ton TON 9 230.00 9 360.00 9 490.00 21 100.00
Rand per kg KG 9.23 9.36 9.49 21.10
Duty per kg KG 37.00% 37.00% 37.00% -
Clearance costs KG 0.65 0.65 0.65 -
COST INTO STORAGE KG 13.30 13.47 13.65 21.10
Storage KG 0.50 0.50 0.50 -
Distribution KG 0.80 0.80 0.80 0.92
Marketing, Administration, Finance KG 0.80 0.80 0.80 0.96
TOTAL COST KG 15.40 15.57 15.75 22.98
Source: Own Estimates
LOCAL BROILER PRODUCTION & MARKET SHARE
58
Local broiler production ≈ 19.1 million birds per week
27%
19%
8% 7%
8%
4%
4%
23%
Astral RCL Country Bird Daybreak Sovereign Grainfields Chubby Chick Other
Source: Own Estimates
LOCAL BROILER PRODUCTION & MARKET SHARE
59
Avg. poultry imports ≈ 8.6 million birds per week
(12 months ending September 2018)
18%
13%
6%
5%
6% 3%
2%
16%
31%
Astral RCL Country Bird Daybreak Sovereign Grainfields Chubby Chick Other Imports
Source: SAPA & Own Estimates
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
F2015 42 363 81 170 108 674 137 660 168 965 209 337 247 672 285 532 327 180 375 717 417 427 460 255
F2016 37 789 83 258 126 866 165 602 200 461 258 134 306 385 360 899 414 947 460 098 502 138 551 209
F2017 50 324 101 279 135 812 173 187 212 399 278 057 319 933 367 106 409 557 453 981 499 952 551 867
F2018 46 348 92 223 140 823 188 065 228 295 281 102 327 753 374 838 412 638 461 454 523 205 579 661
0
100 000
200 000
300 000
400 000
500 000
600 000
F2015 F2016 F2017 F2018
TOTAL POULTRY IMPORTS (CHICKEN, MDM, TURKEY)
60
F2017 50 324 50 955 34 533 37 375 39 212 65 658 41 876 47 173 42 451 44 424 45 971 51 915
F2018 46 348 45 875 48 600 47 242 40 230 52 807 46 651 47 085 37 800 48 816 61 751 56 456
% Var -7,9 -10,0 40,7 26,4 2,6 -19,6 11,4 -0,2 -11,0 9,9 34,3 8,7
bpw* 8,2 8,1 8,6 8,4 7,1 9,4 8,3 8,4 6,7 8,7 11,0 10,0
*bpw ≈ million birds per week
Tons
Source: SAPA
TOTAL POULTRY IMPORTS – COUNTRY OF ORIGIN
61
Brazil 60,6%
EU 14,0%
Argentina 5,9%
US 15,6%
Other 3,9%
Country of origin for poultry imports - 2017
Brazil 62,1%
EU 11,0%
Argentina 6,5%
US 16,8%
Other 3,6%
Country of origin for poultry imports - September 2018 YTD
551 867 tons 579 661 tons
Source: SAPA
TOTAL POULTRY IMPORTS – COUNTRY OF ORIGIN
62 Source: SAPA
Country Imports (tonnes) 2015 2016 2017 2018 YTD
Brazil 241 180 233 787 337 476 272 451 Netherlands 61 995 110 344 112 170 United Kingdom 15 985 45 647 1 366 206 Spain 27 090 39 620 11 138 258 United States 331 26 573 87 059 73 837 Belgium 35 613 24 256 23 451 23 Argentina 27 718 18 713 32 816 28 328 Ireland 13 336 15 556 24 746 21 437 Hungary 10 547 13 174 0 0 Denmark 9 508 9 779 16 884 22 388 Canada 131 8 884 14 431 5 342 Germany 554 6 073 134 168 Poland - 4 773 72 3 292 Thailand 7 616 2 078 4 019 6 254 Chile 408 360 1 770 3 427 Australia 264 254 984 268 France 24 895 105 4 3 Uruguay 182 0 25 359 Switzerland 72 0 0 73 Swaziland 35 0 24 258
SOUTH AFRICAN PROTEIN PRICE COMPARISON
63 Source: SAPA, FNB, Red Meat Industry Forum
Chicken Pork Beef Mutton
Feed Conversion Rate 1.5 2.2 5.5 5.0
Per Capita Consumption 38,9 kg 4,6 kg 17,8 kg 3.2 kg
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
Jan
-13
Ma
r-13
Ma
y-1
3
Ju
l-13
Sep
-13
No
v-1
3
Jan
-14
Ma
r-14
Ma
y-1
4
Ju
l-14
Sep
-14
No
v-1
4
Jan
-15
Ma
r-15
Ma
y-1
5
Ju
l-15
Sep
-15
No
v-1
5
Jan
-16
Ma
r-16
Ma
y-1
6
Ju
l-16
Sep
-16
No
v-1
6
Jan
-17
Ma
r-17
Ma
y-1
7
Ju
l-17
Sep
-17
No
v-1
7
Jan
-18
Ma
r-18
Ma
y-1
8
Ju
l-18
Sep
-18
cents / kg
INDUSTRY MATTERS
POULTRY IMPORTS
65
The EPA (SADC-EU Economic Partnership Agreement) safeguard for poultry
imports from the EU was published on 28 September 2018
Under the provision the safeguard duty on EU frozen bone-in portions will be as
follows:
35.3% from 28 September 2018 up to and including 11 March 2019
30% from 12 March 2019 up to and including 11 March 2020
25% from 12 March 2020 up to and including 11 March 2021
15% from 12 March 2021 up to and including 11 March 2022
This duty levels the playing field somewhat with imports from Brazil and the US
that are subject to the 37% import duty currently in place for those exporting countries
(plus an anti-dumping duty on the US - for which the AGOA 65 000 ton annual quota is
exempt)
Imports from the EU over the past 18 months have been substantially lower than
historical levels, from a time where record EU imports were received in November
2016. This is due to the prevalence of highly pathogenic bird flu in many EU countries
affecting EU trade with South Africa
Import volumes previously supplied by the EU have simply been switched to Brazil,
which is currently the largest exporter of poultry products to South Africa
HIGHLY PATHOGENIC AVIAN INFLUENZA (HPAI)
66
HPAI remains a global challenge, however, world-wide cases of HPAI in
2018 were much lower when compared to 2017
In South Africa, 193 cases of HPAI H5N8 have officially been reported
across 8 provinces (Mpumalanga, Limpopo, Gauteng, KwaZulu Natal, Free
State, North West, Eastern Cape and Western Cape) over a 14 month
period from the 21st of June 2017 to the end of September 2018
The number of HPAI H5N8 outbreaks in South Africa has been reported as
33 in commercial chickens (broiler breeders, commercial layers and
commercial ducks), 47 on ostrich farms, 80 in wild bird (finches, sparrows,
yellow-billed ducks, penguins, terns, white-faced duck, gannets and black
swans), 23 cases in birds kept for hobby (and zoos) purposes and 10 in
backyard chickens
No reported outbreaks of HPAI were experienced by the local poultry
industry since May 2018
LISTERIOSIS
67
On 5 December 2017 the Minister of Health announced a Listeriosis
outbreak in South Africa. This was ultimately declared the worlds worst
Listeriosis outbreak on record with the death toll exceeding 200 people.
Through SAPA the poultry industry engaged with the DOH, NICD, DAFF
and DOA throughout the process, to counter the misrepresentation of the
poultry industry as the primary cause for concern, and to ensure pragmatic
reaction to the crisis. Production was suspended at one poultry abattoir near
Hartebeespoort, but this was not linked to the outbreak strain.
The outbreak strain (ST6) was identified in a processed meat facility in
Polokwane, as announced on 4 March 2018. One of South Africa’s largest
poultry producers was also implicated at the time because the outbreak
strain was detected on polony casings, however this could not be traced to
their manufacturing facilities.
Both businesses experienced severe disruptions to the relevant supply
chains, which also had a delayed secondary impact on both pork and
poultry supply.
Astral was not implicated with the outbreak at any stage. Review of the
company’s food safety management system, the internationally benchmarked FSSC
22 000 accreditation, proved that the Astral’s management of the risk of food borne
pathogens is both world class, and robust in execution. This review included three
independent evaluations of Astral’s Listeria readiness.
Astral did take additional precautionary steps during this period, which have been
adopted as the “new normal” going forward. These included:
increased testing and analysis for Listeria
revised cleaning and sanitation protocols
revitalization of the company’s hygiene campaigns,
improvements in processing based on HACCP methodologies
Renewed and on going staff training.
LISTERIOSIS
68
SOUTH AFRICAN POULTRY ASSOCIATION (SAPA)
69
SAPA has over the past year undergone a restructuring exercise
reflecting a better organised association more reflective of the industry
Both the broiler and layer organisations in this structure will be
independently headed up by newly appointed General Managers
spearheading specific interests in both areas of the industry
Both organisations are managed by appointed boards consisting of
member representatives, the General Manager and a nominated Chairman
SAPA is governed by an appointed board comprising members of both
organisations and led by an appointed Chairperson
Membership of both organisations has improved markedly following the
restructure, with the broiler membership representing approximately 73% of
the local weekly broiler production numbers
A statutory levy has been approved for the table egg industry, and together
with the improved membership of both organisations SAPA is in a better
position to lead important matters of industry interest
Chris Schutte
Chief Executive Officer
Tel : +27 (0) 12 667 5468
Fax : +27 (0) 86 504 2002
email: [email protected]
www.astralfoods.com
Daan Ferreira
Chief Financial Officer
Tel : +27 (0) 12 667 5468
Fax : +27 (0) 86 504 1602
email: [email protected]