South African poultry producer Astral Foods has reported a sharp decline in profits for the first half of its financial year, as rising production costs and softer poultry prices took a toll on the bottom line.
For the six months ending 31 March 2025, the company recorded a modest 3.5% increase in revenue, reaching R10.7 billion ($593.5 million), supported by higher sales volumes and improved pricing in its animal feed operations. However, the poultry division—Astral’s core business—struggled with compressed margins.
Despite a 1.5% increase in poultry revenue to R8.8 billion, the segment recorded an operating loss of R26 million. This marked a steep reversal from the R284 million profit reported in the same period last year. The downturn was driven by a 3.1% decline in average poultry selling prices and a surge in feed and operating costs, which could not be fully recovered through price adjustments in an intensely competitive market.
Group operating profit plunged 50.7% year-on-year to R271 million. Broiler margins turned negative, slipping from 2.4% last year to -1.1% in the latest period. Nonetheless, weekly broiler sales rose by 4.4%, averaging around 5.6 million birds.
In addition to financial headwinds, the company was hit by a cybersecurity breach in March, which disrupted operations for approximately two days. This interruption in processing and distribution led to estimated losses of R20 million in the poultry segment.
Looking ahead, Astral Foods flagged several ongoing risks. The company continues to face uncertainty over the threat of avian influenza and the slow progress in obtaining approval for vaccinations in breeding stock. Broader economic conditions in South Africa are also weighing on consumer demand, with high unemployment, sluggish growth, and limited public investment reducing household purchasing power.
On the international front, questions surrounding South Africa’s eligibility for trade benefits under the African Growth and Opportunity Act (AGOA) may also impact future export opportunities.
Astral’s outlook remains cautious as it navigates through a challenging landscape marked by cost volatility, regulatory hurdles, and economic strain at both domestic and global levels.
