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Poultry Sector Shows Signs of Recovery

by 5m Editor
12 February 2009, at 8:49a.m.

SOUTH AFRICA - Country Bird Holdings has reported a 24 per cent increase in profit.

Integrated poultry, stock feed and beef business, Country Bird Holdings, has announced a 24 per cent rise in operating profit to 96.6 million rand (ZAR) for the half-year to December from ZAR 78.2 million for the comparable period a year ago, according to All Africa.

Financial director, Robbie Taylor, said the results indicated the beginning of a turnaround based on a sustainable recovery of the local poultry sector.

It comes after dismal periods previously when power failures and oversupply cut into the company's earnings.

Revenue rose 33 per cent to ZAR 1.11 billion for the period from last year's ZAR 832 million, and gross profit improved nine per cent to ZAR 128.3 million. This compares with ZAR 117.9 million in 2007 after accounting for a 37 per cent increase in cost of sales, due principally to higher feed and other input costs.

Profit before income tax rose only seven per cent to ZAR 72.5 million due primarily to a 2.5-fold increase in finance charges.

The group's gearing ratio increased to 2.46 from 1.61 a year ago due mainly to the ZAR 106 million debt incurred to effect acquisition of the remaining 50 per cent of Nutrifeeds it did not already own.

The results include disposal of the Elite joint venture with Astral JV . The disposal comes after a protracted struggle by Country Bird to rid itself of what it considered an onerous arrangement with Astral.

Mr Taylor said the market for poultry showed signs of stabilising after a difficult year.