Poultry Industry Trends - Astral Foods...Source: CJA Strategic Risk Brokers 26 SAFEX SOYA BEANS...
70
Annual Results Presentation for the year ended 30 September 2015
Transcript of Poultry Industry Trends - Astral Foods...Source: CJA Strategic Risk Brokers 26 SAFEX SOYA BEANS...
Annual Results Presentation
for the year ended 30 September 2015
2
AGENDA
Business Overview
Poultry Industry Trends
Financial Overview
Industry Matters
Prospects
Q & A
BUSINESS OVERVIEW
4
THE PERIOD IN PERSPECTIVE
Revenue
Operating profit
Earnings per share
Headline earnings per share 133%
The period under review reflects a record performance, with most of the major ‘stars’
aligned for Astral, as a result of an expansion in poultry and feed volumes, assisted by
lower feed costs and increased poultry selling prices
Financial
Indicators 128%
123%
17%
5
THE PERIOD IN PERSPECTIVE
Increase in poultry sales volumes, in particular from the expansion at County
Fair which now processes additional broilers contracted from Quantum
Good poultry selling prices coupled with strong demand and lower stock
levels up to June 2015
Good poultry production efficiencies, in particular an improved mortality rate
together with no cutbacks versus the comparative period have supported
poultry sales volumes
Astral’s forward procurement of raw materials benefited feed prices and
livestock production costs through most of the period under review
Expansion in feed volumes that now includes production of feed from the new
Standerton feed mill previously supplied by Afgri in Kinross
6
THE PERIOD IN PERSPECTIVE
Poultry imports continued at high levels with no impact from the EU anti-
dumping remedies implemented in February 2015
Depreciation of the Rand against the US Dollar eroding most of the benefit of
lower priced CBOT maize import opportunities to the coastal regions of RSA
Load shedding, especially unplanned, had an impact and a direct cost to the
Group of approximately R15 million for the period under review
Currency weakness in Zambia and Mozambique severely impacting raw
material costs and profitability
High poultry stock levels from June 2015 onwards placing pressure on
poultry selling prices
7
POULTRY DIVISION
8
POULTRY DIVISION - OVERVIEW
Operating profit - R million
Operating profit up 533%
• Net margin 7.6% F2014: 1.5%
• Feed costs down 2.5%
Revenue - R million
Revenue up 25%
• Broiler volumes up 13%
• Broiler selling prices up 12%
6,967
8,739
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
F2014 F2015
104
661
-
100
200
300
400
500
600
700
F2014 F2015
9
POULTRY DIVISION - OVERVIEW
Broiler sales volumes increased year-on-year by 12.8% (Slide 10)
Broiler selling prices increased year-on-year by 11.9%
Product mix improvement with fresh increasing by 2% and IQF reducing by 2%
Improved broiler production efficiencies – improved mortality rate (Slide 12)
Average broiler feed price decreases year-on-year by 2.5%
Record level of poultry imports ≈ July 2015 @ 8,6 million birds per week
10
POULTRY DIVISION - SALES
55%
3%
10%
7%
3%
22%
F2014 406 821 Tons
Product Mix
53%
3%
12%
8%
3%
21%
F2015 458 881 Tons
Volume increase ≈ 13%
11
POULTRY DIVISION - PRODUCTION
Poultry Production Volume Growth
Farm efficiencies = 44 000 bpw
Increased placements = 126 000 bpw
Average birds per week
(increase of 722 000 birds ≈ 17.2%)
Quantum = 552 000 bpw
F2014 =
4200
000
F2015 =
4922
000
13.1%
3.0%
1.0%
12
BROILER PRODUCTION PERFORMANCES
70%
75%
80%
85%
90%
95%
100%
105%
110%
115%
120%
F2009 F2010 F2011 F2012 F2013 F2014 F2015
Mortality Feed conversion (FCR) Efficiency factor (PEF)
Key indicators base-lined to 100% in 2009
13
BROILER PRODUCTION PERFORMANCES
95%
96%
97%
98%
99%
100%
101%
102%
103%
104%
105%
106%
F2009 F2010 F2011 F2012 F2013 F2014 F2015
Slaughter age Live weight Processing yield
Key indicators base-lined to 100% in 2009
14
POULTRY DIVISION - PROSPECTS
Higher feed costs in the new financial reporting period
Higher poultry stock levels in general will exert pressure on selling prices
USA export quota (AGOA) could be additive to already high poultry imports
Proposed brining regulations – impact on volumes and IQF selling price
Optimising product mix with focus on market and consumer preferences
Broiler production efficiencies currently challenged by numerous health issues
15
FEED DIVISION
16
FEED DIVISION - OVERVIEW
Operating profit - R million
Operating profit up 20%
• Net margin at 6.8% F2014: 6.4%
• Benefit from increased volumes
Revenue - R million
Revenue up 13%
• Sales volumes up 12%
• Avg. selling price up 1%
5,506
6,236
-
1,000
2,000
3,000
4,000
5,000
6,000
F2014 F2015
354
423
-
50
100
150
200
250
300
350
400
450
F2014 F2015
17
FEED DIVISION - OVERVIEW
Feed volumes increased by 12.4% due to higher inter-group volumes (up 23.7%)
Rand per ton margin improvement on prior year despite a competitive landscape
Inflationary costs were successfully recovered from the market
Operational cost benefits from the new Standerton feed mill
Standerton feed mill producing on average 24 000 tons of feed per month
Raw material price increases in the last quarter of the period under review
18
FEED DIVISION - SALES
60%
7%
20%
13%
Meadow Feeds - Sales Mix
55%
9%
22%
14%
605 066 Tons
F2015 1 429 772 Tons
Volume increase ≈ 12%
F2014 1 272 298 Tons
19
FEED DIVISION - PROSPECTS
Maize crop of 9,9 million tons for 2015/16 – smallest crop since 2007
Strong El Niño impact to cause extremely dry and hot conditions this summer
Adverse planting conditions could lead to a consecutive poor maize crop
Increasing local maize prices with excessive upward pressure on feed prices
Global balance sheets for coarse grains remain especially healthy
Maize import program into the coastal regions of South Africa to continue
20
OTHER AFRICA DIVISION
21
OTHER AFRICA DIVISION - OVERVIEW
Operating profit - R million
Operating profit down 51%
• Net margin 3.4% F2014: 7.1%
• Exchange rate impact
Revenue - R million
Revenue down 1%
• Feed volumes down 3%
• Hatchery volumes up 2%
499 494
-
50
100
150
200
250
300
350
400
450
500
550
F2014 F2015
35
17
-
5
10
15
20
25
30
35
40
F2014 F2015
22
OTHER AFRICA DIVISION - OVERVIEW
• Zambia
Profitability at Tiger Animal Feeds severely impacted by currency exchange
movements
Tiger Chicks sales volumes increased by 6% over comparative period with this
business posting an improved performance
• Mozambique & Swaziland
Profitability at Meadow Mozambique impacted negatively by currency exchange
movements
Mozpintos sales volumes increased by 30% over comparative period
Good performance from National Chicks Swaziland
23
OTHER AFRICA DIVISION - PROSPECTS
• Zambia
The procurement, financing and storage of maize in the local currency will
reduce exposure to USD denominated raw material purchases
Tiger Chicks increasing exports of hatching eggs and day old chicks into
other African markets
• Mozambique & Swaziland
A further nine own managed depots are targeted for South and Central
Mozambique in F2016 to improve product availability and sales
Expansion of broiler breeder capacity at National Chicks Swaziland to take
place in F2016 will increase the production of hatching eggs at a lower cost than imported hatching eggs
24
INDUSTRY TRENDS
25
SAFEX YELLOW MAIZE PRICE
Source: CJA Strategic Risk Brokers
26
SAFEX SOYA BEANS PRICE
Source: CJA Strategic Risk Brokers
13.2
2
13.4
7
13.4
1
12.7
0
11.9
6
11.9
5
11.7
5
12.2
2
11.7
5
11.7
6
12.2
9
11.8
3
12.3
3
12.8
3 13.5
1
13.3
4
13.4
2
13.2
0
13.3
8
13.4
6
13.1
8
12.7
9
12.8
6 13.5
6
13.9
1
14.9
0 15.5
3
14.5
1
13.6
6
13.2
1
13.4
2
13.1
5
12.6
7
12.5
1
13.4
0
15.0
3 1
5.7
9
15.5
5
14.8
2
13.8
5
14.0
8
15.5
3
15.3
5
15.2
4
15.0
7
15.4
2
15.4
4
16.0
1
16.2
7
16.2
6 1
7.0
5
16.1
5
16.6
0
16.8
8
16.9
7
17.1
3
17.2
3
15.9
4
16.9
6
16.7
4 17.4
4
18.4
8
18.6
8
17.6
9
17.9
3
18.3
2
18.6
5
19.1
8
18.8
2
18.2
3
17.8
0
17.8
0
11.00
11.50
12.00
12.50
13.00
13.50
14.00
14.50
15.00
15.50
16.00
16.50
17.00
17.50
18.00
18.50
19.00
19.50
Oc
t-0
9
De
c-0
9
Fe
b-1
0
Ap
r-1
0
Ju
n-1
0
Au
g-1
0
Oc
t-1
0
De
c-1
0
Fe
b-1
1
Ap
r-1
1
Ju
n-1
1
Au
g-1
1
Oc
t-1
1
De
c-1
1
Feb
-12
Ap
r-1
2
Ju
n-1
2
Au
g-1
2
Oc
t-1
2
De
c-1
2
Fe
b-1
3
Ap
r-1
3
Ju
n-1
3
Au
g-1
3
Oc
t-1
3
De
c-1
3
Fe
b-1
4
Ap
r-1
4
Ju
n-1
4
Au
g-1
4
Oc
t-1
4
Dec-1
4
Fe
b-1
5
Ap
r-1
5
Ju
n-1
5
Au
g-1
5
Broiler selling price Six month average
27
INDUSTRY BROILER SELLING PRICES
Source: SAPA
Rand per kilogram
28
CHANGE IN BROILER SELLING PRICE VS FEED PRICE
Source: SAPA & Own Data
-30%
-20%
-10%
0%
10%
20%
30%
40%
Oc
t-0
9
De
c-0
9
Feb
-10
Ap
r-1
0
Ju
n-1
0
Au
g-1
0
Oc
t-1
0
Dec-1
0
Feb
-11
Ap
r-1
1
Ju
n-1
1
Au
g-1
1
Oc
t-1
1
De
c-1
1
Feb
-12
Ap
r-1
2
Ju
n-1
2
Au
g-1
2
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
% Change in feed price % Change in broiler selling price
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
Jan
-10
Ma
r-1
0
Ma
y-1
0
Ju
l-1
0
Se
p-1
0
No
v-1
0
Jan
-11
Ma
r-1
1
Ma
y-1
1
Ju
l-1
1
Se
p-1
1
No
v-1
1
Jan
-12
Ma
r-1
2
Ma
y-1
2
Ju
l-1
2
Se
p-1
2
No
v-1
2
Jan
-13
Ma
r-1
3
Ma
y-1
3
Ju
l-1
3
Se
p-1
3
No
v-1
3
Jan
-14
Mar-
14
Ma
y-1
4
Ju
l-1
4
Sep
-14
No
v-1
4
Jan
-15
Mar-
15
Ma
y-1
5
Ju
l-1
5
Total poultry imports 6 per. Mov. Avg. (Total poultry imports)
29
POULTRY IMPORTS PER MONTH
Tons
48 357 tons
EU anti-dumping duties imposed
Source: SAPA
30
FINANCIAL OVERVIEW
31
ABRIDGED STATEMENT OF COMPREHENSIVE INCOME
Year ended 30 September 2015
R million
2014
R million % change
Revenue 11 266 9 602
Operating profit 1 101 493
Operating profit margin 9.8% 5.1%
Net finance costs (10) (25)
Share of profit in associates 3 2
Profit before tax 1 094 470
Tax (314) (129)
Profit for the period 780 341
Headline earnings 780 330
EPS – Cents 2 013 884
HEPS – Cents 2 016 864
17%
123%
133%
129%
136%
133%
128%
32
GROUP SIX MONTHLY REVENUE AND PROFITABILITY
3319 3534
3744 3663 3591 3415
3552 3675
4039 4122 4219 4290
4700 4902
5755
5511
407
141
279 302 304 281
375 299 324
153 59 208 213
280
550 551
0
200
400
600
800
1000
1200
1400
1600
1800
2000
0
1000
2000
3000
4000
5000
6000
1H08 2H08 1H09 2H09 1H10 2H10 1H11 2H11 1H12 2H12 1H13 2H13 1H14 2H14 1H15 2H15
External Revenue Operating Profit Margin %
(R million)
33
GROUP ANNUAL REVENUE
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
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
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
0.000
2.000
4.000
6.000
8.000
10.000
12.000
14.000
16.000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Poultry Feed Other Africa External revenue
(R billion)
34
GROUP SIX MONTHLY OPERATING PROFIT
134 128 229 124
140
-3 -117
5 45 59 351 310
151 130
133
149 154
135 156 173
157 197
186
237 304 281
375 299 324
153
59
203 213
280
550 551
-0.1
0.1
0.3
0.5
0.7
0.9
1.1
1.3
1.5
-120
-20
80
180
280
380
480
580
680
1H10 2H10 1H11 2H11 1H12 2H12 1H13 2H13 1H14 2H14 1H15 2H15
Poultry Feed Other Africa
Change in feed price Change in realisations (SAPA) Broiler volumes
Feed volumes
(R million)
124 90 174 238 383 494 476 163 282 262 353 137
-112
104 661
79 130
153
151
214
272 333
385
261 281
282
289
329
354
423
203 220
328
389
597
766 809
548 581 585
674
477
262
493
1101
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%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
-120
80
280
480
680
880
1080
F2001 F2002 F2003 F2004 F2005 F2006 F2007 F2008 F2009 F2010 F2011 F2012 F2013 F2014 F2015
Poultry Feed Other Africa
35
GROUP ANNUAL OPERATING PROFIT
(R million)
36
ABRIDGED STATEMENT OF FINANCIAL POSITION
September 2015
R million
September 2014
R million % change
Non-current assets 2 234 2 242
Net working capital 776 452
Current assets (excl. cash) 2 261 2 003
Current liabilities (excl. borrowings) (1 485) (1 551)
Non-current liabilities (excl. borrowings) (582) (575)
Net assets 2 428 2 119
Net debt 57 174
Loans 83 206
Cash and cash equivalents (26) (32)
Equity 2 371 1 945
Total 2 428 2 119
15%
22%
15%
72%
-4%
67%
13%
37
WORKING CAPITAL
For the twelve months ended 30 September 2015
R million
2014
R million
Variance
R million
Current assets 2 261 2 003 258
Inventory 1 370 1 096 274
Trade receivables 786 777 9
Other 105 130 (25)
Current liabilities (1 485) (1 551) 66
Trade payables (1 156) (1 352) 196
Other (329) (199) (130)
Net working capital 776 452 324
Major variances:
Increased stock levels – poultry 197
Increased stock levels – feed 84
Settlement – raw material creditors 320
Provision for employee benefits (171)
38
ABRIDGED STATEMENT OF CASH FLOW
For the twelve months ended 30 September 2015
R million
2014
R million
Cash operating profit 1 436 671
Working capital movement (441) 33
995 704
Tax paid (344) (100)
Net interest paid (10) (37)
Capital expenditure (203) (395)
438 172
Dividends paid (321) (163)
Other cash flow items 10 77
127 86
Loans (repaid) / received (120) 24
Movement in cash equivalents 7 110
Effect of exchange rate changes (13) -
Opening balance 32 (78)
Closing balance 26 32
39
CAPITAL EXPENDITURE
Year ended 30 September 2015
R million
2014
R million
Depreciation 153 135
Total capex 203 395
Commitments 67
Total spent and committed 270
40
KEY FINANCIAL RATIOS
37 36
48 48
51
65
55
31 31 30
34
23
20
41
31 33
39 39
46
49
45
25 26 26
29
21
13
19
36
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
7.3 5.9 8.3
9.6
12.3
14.8
12.8
8.0 7.8 8.4
9.3
5.8
3.1
5.1
9.8
5.5 5.5 6.1
4.7 4.1 4.4 4.3 4.7 4.8
3.6 3.7 4.0 3.9 4.2
0
5
10
15
20
25
30
0
10
20
30
40
50
60
70
Sep-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
RONA ROE EBITDA margin PBIT margin Asset turn
41
KEY FINANCIAL INDICATORS
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
23
20
21
29
17
9
19
12
15
11 10
16
21
18
24 26
22 21
12
14
14
9
3
7
15
9 2
0
10
20
30
40
50
60
70
Sep-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
NAV share Working capital days Net Debt / Equity
42
HEADLINE EARNINGS PER SHARE & DIVIDEND PER SHARE
272 326
487
631
958
1286
1381
840 890
960
1148
787
434
864
2016
90 108 168 230
380
585
700 700 700 760
810
656
222
440
1150
0
500
1000
1500
2000
2500
F2001 F2002 F2003 F2004 F2005 F2006 F2007 F2008 F2009 F2010 F2011 F2012 F2013 F2014 F2015
Headline earnings per share Dividend per share
(cents per share)
43
IN SUMMARY
Poultry division reported a more normalised profit margin
Poultry division benefited from various volume growth initiatives
Feed division benefited from Standerton feed mill contribution
Net debt to equity ratio of 2.4% (30 Sep 2014: Net debt to equity ratio of 8.9%)
Final dividend of 575 cps declared (total dividend of 1 150 cps up 161%)
Board composition - Diederik Fouche (Appointed as Non-Executive Director)
44
INDUSTRY MATTERS
45
BRINING
70 : 30 - current industry practice
75 : 25 - industry proposal
85 : 15 - draft DAFF regulations
Various interactions with the DAFF Minister & Deputy Minister
DAFF “mistakenly” released a press statement on 1 October 2015 stating “Total
brine injection allowed for individual portions is limited to a maximum of 15%”
DAFF indications of further debate between industry and legislators
As of 13 November 2015, no amendments to the Poultry Meat Regulations have
been published in the Government Gazette
46
IMPORTS (EU & US)
On 27 Feb 2015 anti-dumping duties on bone-in portions were imposed on
Germany, Netherlands and United Kingdom
Duties range from 3.86% to 73.33% on frozen bone in chicken portions
EU imports are now originating from Spain, Belgium and France
US quota of 65 000 tons leg quarter volumes per annum to RSA as part of AGOA
renewal negotiated in Paris in June 2015
Poultry industry bodies of both countries at loggerheads over diversion from the
agreement negotiated in Paris during June 2015
Current media hype and misrepresentation of technical aspects surrounding the
AGOA / poultry quota agreement
PROSPECTS
48
PROSPECTS
The slowing level of growth in the economy and higher unemployment levels will
continue to hamper an increase in the per capita consumption of poultry.
The strong El Niño and impact on planting conditions will negatively impact crop
yields leading to higher feed prices in the new reporting period.
Strong likelihood for the introduction of brining regulations which could result in
lower volumes for the industry, and higher selling prices for the consumer. These
regulations if promulgated at the proposed levels by DAFF, as well as the technical
format of the regulations, will likely be challenged by the industry.
The annual quota for 65 000 tons of US poultry imports, free of anti-dumping duties
negotiated around the renewal of AGOA, is likely to negatively impact local producers
as high levels of poultry imports continue unabated.
Further consolidation in the industry could follow as a result of the above as the
resilience of the poultry industry will be tested to the limit.
Astral’s best cost integrated strategy has further strengthened on the back of
selective investments contributing to higher poultry volumes, improved efficiencies
and feeding costs into the future.
49 10 April 2015
R1,1 billion RECORD PROFIT IN ASTRAL’S HISTORY
40,7 million
LIVE BIRDS ON FARM
1,5 million TONS OF ANIMAL FEED PRODUCED AT SEVEN MILLS
5,0 million
BROILERS SLAUGHTERED PER WEEK
2,4% DEBT : EQUITY
“If you want to go fast, go alone…. if you want to go far, go together”
50
ADDITIONAL INFORMATION
50
51
POULTRY – SIX MONTHLY REVENUE
2581 2449
2606 2652
2878 2956 2952
3049
3317
3650
4503
4237
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1000
1500
2000
2500
3000
3500
4000
4500
5000
5500
6000
1H10 2H10 1H11 2H11 1H12 2H12 1H13 2H13 1H14 2H14 1H15 2H15
Revenue Change in realisations (SAPA) Change in volumes
(R million)
52
FEED – SIX MONTHLY REVENUE
1847 1730 1708
1770
2175 2152
2397 2519 2550
2956 2961
3275
0.00000
0.20000
0.40000
0.60000
0.80000
1.00000
1.20000
1.40000
1.60000
1000
1500
2000
2500
3000
3500
4000
4500
1H10 2H10 1H11 2H11 1H12 2H12 1H13 2H13 1H14 2H14 1H15 2H15
Revenue Change in volumes Change in feed price
(R million)
53
SAFEX YELLOW MAIZE VS CBOT CORN IN RAND TERMS
Source: CJA Strategic Risk Brokers
54
SOUTH AFRICA – TOTAL MAIZE SUPPLY & DEMAND
2010/11 2011/12 2012/13 2013/14 2014/15E 2015/16F 2016/17F
Actual Actual Actual Actual Actual Estimate Forecast
Carry In (1 May) 2,131 2,336 991 1,414 589 2,077 1,221
Crop Estimate 12,815 10,360 12,121 11,811 14,250 9,942 9,505
Retentions 433 460
Sagis Delivery 12,092 10,394 11,972 11,072 13,817 9,482 9,130
Minus early deliveries 0 0 0 0 0 535 0
Imports 0 421 11 80 65 837 1,280
Total Supply 14,224 13,151 12,973 12,566 14,471 11,860 11,631
Domestic Usage Food 4,513 4,512 4,499 4,583 4,840 4,856 4,800
Domestic Usage Feed 4,271 4,362 4,378 4,715 5,041 5,210 5,126
Gristing, withdrawn & released 866 693 674 480 376 316 300
Total Domestic Usage 9,650 9,567 9,551 9,777 10,257 10,382 10,226
Exports & Sundries 2,238 2,590 2,008 2,122 2,153 793 859
Plus early deliveries 0 0 0 0 0 535 0
Carry Out (30 Apr) 2,336 994 1,414 590 2,062 1,221 546
No of days usage 88 38 54 25 73 43 19
STU 24.20% 10.38% 14.81% 6.04% 20.10% 11.76% 5.34%
Marketing year (May to April)
'000 tons
Source: CJA Strategic Risk Brokers
22.9%
24.2%
10.4%
14.8%
6.0%
20.1%
11.8%
5.3%
0%
5%
10%
15%
20%
25%
0
500
1,000
1,500
2,000
2,500
2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16E 2016/17F
Carry out Maize stock to use ratio
55
RSA MAIZE CARRY OUT AND STOCK TO USE RATIO
‘000 Tons
Source: CJA Strategic Risk Brokers
56
WORLD CORN ENDING STOCKS AND STU RATIO
137 129
116
140
168
194
216
16.7%
15.2%
13.1%
16.2%
17.7%
19.9%
22.3%
12%
13%
14%
15%
16%
17%
18%
19%
20%
21%
22%
23%
24%
0
25
50
75
100
125
150
175
200
225
250
201
0
201
1
201
2
201
3
201
4
201
5
201
6E
End stock STU
Million Tons
Source: CJA Strategic Risk Brokers
57
EL NIÑO SOUTHERN OSCILLATION (ENSO) – FORECAST
Source: International Research Institute for Climate and Society (IRI) – Columbia University
58
EL NIÑO IMPACT ON SOUTH AFRICA
Source: International Research Institute for Climate and Society (IRI) – Columbia University
59
SOUTH AFRICA – VEGETATION HEALTH INDEX
Source: NOAA - National Environmental Satellite, Data, and Information Service (VHI)
60
BROILER FEED
INGREDIENT INCLUSION AND COST CONTRIBUTION
68.5 49.7 66.9 47.5 67.0 44.6 65.9 42.5 64.9 40.0 66.2 42.7
16.6
24.7
14.0
20.9
17.0
26.8
18.9
29.2
16.5
25.0
14.7
20.4
6.1
5.4
8.5
8.0
7.0
6.8
6.0
5.7
7.5
7.4
7.4
7.5
1.4
3.6
0.5
1.2
0.4
1.1
0.9
2.4
0.3
0.9
0.4
1.3
0.3
3.5
0.3
3.8
0.3
4.1
0.4
5.5
0.3
4.2
0.4
6.2
7.1
13.2
9.9
18.5
8.4
16.6
7.9
14.7
10.5
22.4
10.9
21.9
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1H13 Incl. 1H13Contr.
2H13 Incl. 2H13Contr.
1H14 Incl. 1H14Contr.
2H14 Incl. 2H14Contr.
1H15 Incl. 1H15Contr.
2H15 Incl. 2H15Contr.
Maize Soybean Meal Sunflower Meal Fish Meal Vitamins, Minerals and Medication. Other
61
BRAZIL & EUROPE PRODUCT COST BENCHMARK
Ex BRAZIL – November 2015
FROZEN LEG QUARTERS BULK PACKED
CIF DBN US$ per ton TON 1 000.00 1 000.00 1 000.00 SA COST
R/$ exchange rate R$ 13.50 13.82 14.25
Rand per ton TON 13 500.00 13 820.00 14 250.00 21 750.00
Rand per kg KG 13.50 13.82 14.25 21.75
Duty per kg KG 37% 37% 37% -
Clearance costs KG 0.50 0.50 0.50 -
COST INTO STORAGE KG 19.00 19.43 20.02 21.75
Storage KG 0.50 0.50 0.50 -
Distribution KG 0.64 0.64 0.64 0.84
Marketing, Administration, Finance KG 0.78 0.78 0.78 1.04
TOTAL COST KG 20.92 21.35 21.94 23.63
Ex UNITED KINGDOM – November 2015
FROZEN LEG QUARTERS BULK PACKED
CIF DBN US$ per ton TON 1 000.00 1 000.00 1 000.00 SA COST
R/$ exchange rate R$ 13.50 13.82 14.25
Rand per ton TON 13 500.00 13 820.00 14 250.00 21 750.00
Rand per kg KG 13.50 13.82 14.25 21.75
Duty per kg KG 30.99% 30.99% 30.99% -
Clearance costs KG 0.50 0.50 0.50 -
COST INTO STORAGE KG 18.18 18.60 19.17 21.75
Storage KG 0.50 0.50 0.50 -
Distribution KG 0.64 0.64 0.64 0.84
Marketing, Administration, Finance KG 0.78 0.78 0.78 1.04
TOTAL COST KG 20.10 20.52 21.09 23.63
62
BRAZIL & EUROPE PRODUCT COST BENCHMARK
Ex NETHERLANDS – November 2015
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$ 13.50 13.82 14.25
Rand per ton TON 14 175.00 14 511.00 14 962.50 21 750.00
Rand per kg KG 14.18 14.51 14.96 21.75
Duty per kg KG 22.81% 22.81% 22.81% -
Clearance costs KG 0.50 0.50 0.50 -
COST INTO STORAGE KG 17.91 18.32 18.88 21.75
Storage KG 0.50 0.50 0.50 -
Distribution KG 0.64 0.64 0.64 0.84
Marketing, Administration, Finance KG 0.78 0.78 0.78 1.04
TOTAL COST KG 19.83 20.24 20.80 23.63
Ex EUROPE NON-TARIFF COUNTRIES – November 2015
FROZEN LEG QUARTERS BULK PACKED
CIF DBN US$ per ton TON 960.00 960.00 960.00 SA COST
R/$ exchange rate R$ 13.50 13.82 14.25
Rand per ton TON 12 960.00 13 267.20 13 680.00 21 750.00
Rand per kg KG 12.96 13.27 13.68 21.75
Duty per kg KG 0.00% 0.00% 0.00% -
Clearance costs KG 0.50 0.50 0.50 -
COST INTO STORAGE KG 13.46 13.77 14.18 21.75
Storage KG 0.50 0.50 0.50 -
Distribution KG 0.64 0.64 0.64 0.84
Marketing, Administration, Finance KG 0.78 0.78 0.78 1.04
TOTAL COST KG 15.38 15.69 16.10 23.63
63
LOCAL BROILER PRODUCTION AND MARKET SHARE
Source: Own Estimates
25%
23%
8%
6%
5%
33%
Astral RCL Country Bird Afgri Sovereign Other
Local broiler production ≈ 19,3 million birds per week
64
TOTAL POULTRY MARKET PARTICIPATION
Source: Own Estimates & SAPA (Imports)
Avg. poultry imports ≈ 6,9 million birds per week (to August 2015 avg. 8 months)
19%
17%
5%
5% 4%
24%
26%
Astral RCL Country Bird Afgri Sovereign Other Imports
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
F2012 33,348 67,819 100,540 135,614 170,194 204,560 244,296 278,914 305,472 326,520 353,296 387,173
F2013 47,942 89,095 117,712 145,426 172,727 207,148 243,623 282,790 316,047 343,913 371,741 409,158
F2014 28,250 66,647 99,050 124,194 148,092 179,811 216,947 253,490 294,102 320,603 346,582 383,710
F2015 42,363 81,170 108,674 137,660 168,965 209,337 247,672 285,532 327,180 375,537 417,247
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
F2012 F2013 F2014 F2015
65
TOTAL POULTRY IMPORTS (CHICKEN, TURKEY, MDM)
F2014 28,250 38,397 32,403 25,144 23,898 31,719 37,136 36,543 40,612 26,501 25,979 37,128
F2015 42,363 38,807 27,504 28,896 31,305 40,372 38,335 37,860 41,648 48,357 41,710
% Var 49.9 1.1 -15.1 14.9 31.0 27.3 3.2 3.6 2.6 82.5 60.6
bpw* 7,5 6,9 4,9 5,1 5,6 7,2 6,8 6,7 7,4 8,6 7,5
Source: SAPA *bpw ≈ million birds per week
Tons
66
TOTAL POULTRY IMPORTS – COUNTRY SPLIT
Source: SAPA
Brazil 42.9%
EU 48.5%
Argentina 5.5%
Other 3.2%
Country of origin for poultry imports - 2014
Brazil 51.7%
EU 39.5%
Argentina 6.5%
Thailand 1.8% Other 0.5%
Country of origin for poultry imports - 2015 YTD
67
LOCAL BROILER PRODUCTION, IMPORTS & PER CAPITA CONSUMPTION
Source: SAPA
0
5
10
15
20
25
30
35
40
5
7
9
11
13
15
17
19
21
23
25
27
29
Oc
t-0
9
De
c-0
9
Fe
b-1
0
Ap
r-1
0
Ju
n-1
0
Au
g-1
0
Oc
t-1
0
Dec-1
0
Fe
b-1
1
Ap
r-1
1
Ju
n-1
1
Au
g-1
1
Oc
t-1
1
De
c-1
1
Fe
b-1
2
Ap
r-1
2
Ju
n-1
2
Au
g-1
2
Oc
t-1
2
De
c-1
2
Fe
b-1
3
Ap
r-1
3
Ju
n-1
3
Au
g-1
3
Oc
t-1
3
De
c-1
3
Fe
b-1
4
Ap
r-1
4
Ju
n-1
4
Au
g-1
4
Oc
t-1
4
De
c-1
4
Fe
b-1
5
Ap
r-1
5
Ju
n-1
5
RSA broilers (slaughtered / week) Poultry imports (birds / week)
Broiler selling price (Rand / kg) Per capita consumption (kg)
Million birds per week / Rand per kg
68
BROILER PRICE VS FOOD PRICE INFLATION
Source: SAPA & CJA Strategic Risk Brokers
70
75
80
85
90
95
100
105
110
115
120
125
130
135
140
145
150
70
75
80
85
90
95
100
105
110
115
120
125
130
135
140
145
150
Oc
t-0
8
De
c-0
8
Feb
-09
Ap
r-0
9
Ju
n-0
9
Au
g-0
9
Oc
t-0
9
De
c-0
9
Feb
-10
Ap
r-1
0
Ju
n-1
0
Au
g-1
0
Oc
t-1
0
De
c-1
0
Feb
-11
Ap
r-1
1
Ju
n-1
1
Au
g-1
1
Oc
t-1
1
De
c-1
1
Feb
-12
Ap
r-1
2
Ju
n-1
2
Au
g-1
2
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
Ind
ex
(O
cto
ber
20
08
= 1
00
)
Broiler selling price index SA food price index
Poly. (Broiler selling price index) Poly. (SA food price index)
69
SOUTH AFRICAN PROTEIN PRICE COMPARISON
Source: SAPA, FNB, Red Meat Industry Forum
Chicken Pork Beef Sheep
Feed Conversion Rate 1.7 2.2 5.5 5.0
Per Capita Consumption 38.0 kg 4.6kg 18.1kg 3.5kg
1000
1500
2000
2500
3000
3500
4000
4500
5000
5500
6000
Oct-
09
Dec-0
9
Fe
b-1
0
Ap
r-10
Ju
n-1
0
Au
g-1
0
Oct-
10
Dec-1
0
Fe
b-1
1
Ap
r-11
Ju
n-1
1
Au
g-1
1
Oct-
11
Dec-1
1
Fe
b-1
2
Ap
r-12
Ju
n-1
2
Au
g-1
2
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
Cents per kg
70
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
Group Financial Director
Tel : +27 (0) 12 667 5468
Fax : +27 (0) 86 504 1602
email: [email protected]
