Unaudited business segment results

Twelve months ended 30 June 2009 versus twelve

months ended 30 June 2008

 

 

  AFGRI FOODS  
  Animal protein     Oil and protein  
  12 months  
ended  
30 June  
2009  
R’000  		 12 months  
ended  
30 June  
2008  
R’000  		   12 months
ended  
30 June  
2009  
R’000  		 12 months  
ended  
30 June  
2008  
R’000  
Revenue   2 582 104   2 566 390     501 441   518 731  
– sale of goods and services   2 582 104   2 566 390     501 441   518 731  
– interest   –   –     –   –  
Operating profit/(loss) (before corporate costs)  277 965   191 385     30 105   40 185  
Other amounts included in operating profit/(loss)  (73 115)  (56 725)    (14 241)  (15 518) 
– other operating income   –   –     –   –  
– pension fund surplus   –   –     –   –  
– depreciation and amortisation   (50 827)  (42 035)    (5 659)  (7 897) 
– allocation of Corporate costs   (22 288)  (14 690)    (8 582)  (7 621) 
Operating profit/(loss)  204 850   134 660     15 864   24 667  
Other items of profit or loss   –   –     –   –  
– fair value adjustment to disposal group assets   –   –     –   –  
– share of profit/(loss) of associates   –   –     –   –  
Profit/(loss) before finance costs   204 850   134 660     15 864   24 667  
Finance costs   (51 171)  (14 837)    (909)  2 735  
Profit/(loss) before income tax   153 679   119 823     14 955   27 402  
Income tax            
Profit/(loss) after income tax            
Assets   1 429 711   1 130 536     253 552   358 243  
Non-current assets   811 550   617 125     104 082   137 561  
Other current assets   263 763   202 205     67 242   80 607  
Trade and other receivables   346 938   288 236     78 131   116 806  
Cash and cash equivalents   7 460   22 970     4 097   23 269  
Liabilities   662 040   616 042     121 652   146 163  
Non-current liabilities   141 099   109 268     8 972   12 565  
Other current liabilities   520 941   506 774     112 680   133 598  
Borrowings to finance trade receivables   –   –     –   –  
Call loans and overdrafts   –   –     –   –  
Capital expenditure (including other intangible assets)   212 535   160 457     3 506   15 927  
Contribution to Group continuing operations (%)           
Revenue   29   32     6   6  
Profit before tax   28   29     3   7  
Number of employees (total)  1 641   1 172     386   372  
Full-time   770   683     334   347  
Part-time   871   489     52   25  
Highlights  
Animal protein
The division saw a slight (3%) reduction in volumes as some customers purchased feed based on price rather than performance. In a declining commodity price market, smaller opposition feed manufacturers are able to buy at spot and, temporarily offer a cheaper product. Margin maintenance was achieved through a managed procurement strategy, improved formulation technology and developments in the manufacturing process.

The expansion project at Daybreak Farms, increasing weekly capacity to 650 000 birds was commissioned in March. Overall, the year saw a 10% increase in volumes. Besides the improved NSV, the operation has contributed to improved financial results through improved on-farm and abattoir performances driven by capital expenditure complementary to the expansion project spend. Overall the PEF ratio was improved by 31 points (approximately 13%) and abattoir yields have improved by 6% since the completion of the project.   		 
 
Oil and protein
The collapse of soft oil prices during the latter part of 2008 and a softening in the retail environment resulted in pressure on the margins of the Nedan operation. Conditions have subsequently improved.

In the coming year capital expenditure will be invested at Nedan to increase the flexibility of the plant to process a wide range of seed.  		 
Challenges  
Animal feeds expansion into KwaZulu-Natal
Exploring opportunities to expand broiler interests
Improvement in broiler farm efficiencies and abattoir yields
Continued investment in technology   		 
 
Increased profitability
Improvements in extraction yields & efficiencies
Capacity to crush wider range of oilseeds
Increase in oil sale volumes   		 
       
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