Astral Foods Ltd

Good morning to you all. Welcome to all our investors, colleagues, and then our chairman, Teance. And we have Vili and Bridget from our board here today. And then as I walked in, Anthony Clark said to me, he thinks he must be in the wrong place because he saw the old bugger here. So welcome, Chris. Hello to you. Chris has joined us today. Anthony called you the old bugger, not me. But let's dive into the presentation. We'll try and stick to the time. As you know, We are always quite diligent on that and we'll get into the business overview. Fortunately, all green arrows, and Chris used to have a comment for this, which I'll steer away from, but absolutely a good scoreboard. Revenue up 10%. One always likes to see that growth in revenue. That ultimately is what drives the bottom line growth, especially in an inflationary cost environment. And we'll dig a little deeper into where we generated that additional revenue from a little later. Profits up 11% to just under 1.3 billion Rand. And then headline earnings up 14% to 21.93. We closed the year with a very healthy cash balance, just over a billion Rand. And on that, we're able to declare a final dividend of 8 rand ATS share, taking the total dividend for the year to 11 rand. So good cash generated from operations at 1.7 billion rand, up 20%. And we will spend a lot more time on those numbers later in the presentation. It's very pertinent to point out that this was a tale of two halves, as we've phrased it. And I thought we should give just a bit of perspective on what changed or happened between the first and the second half. And at our interim results in May, you will recognize some of these outlook prospects that we put up on the slides at that time. And it did point to some of the key drivers in the business coming through, which at the time were supporting the better outlook for that half. And we said then that we expected good prospects for the current local maize crop. I think we were the only ones, if you look at that, the first crop estimate committee number was 13.9 million tons and we ended up on 16.3. So Anthony, I think perhaps we were the only ones in the trade that saw this crop coming. But anyway, be that as it may, we had some good procurement there and that helped with softer feed prices that we spoke of at the time. We certainly had lower finished stock levels in poultry. And as you know, we increased volumes from the 9th of March, adding an additional 400,000 birds a week to our production. and then we spoke a lot during 2024 after the tumultuous years of 23 with load shedding and bird flu where we set sail on this transfer you know this transition journey or this journey to turn around the results and project 3r was launched reset restart and refocus And this past year was a lot about refocus. It's just to focus on the basics in the business and those key drivers, particularly in the cost of producing chicken, which is critically important to achieving the results that we see today. So this is the, you'll see the waterfall later, as we've called it before for the year on year comparison, but that almost clouds out some of the tailwinds that we had in the second half. So I wanted to just point to the movement year on year. And you know, we reported a 271 million profit for the first half. That was down significantly on the first half in 2024, about 60%, at least I think at the time it was down. But then you can see the impact of the selling price recoveries coming through. We had significant selling price deflation through 2024 and into the first quarter of 2025. We had to go out there and look for some support in selling prices. Broiler margins were reported at that time of minus 1.1%, negative margins, certainly not sustainable in any business, never mind a poultry business. we increase sales volumes one would expect in the slide that this bar would have had more of an effect but we should remember that in the first half we sold a lot of product out of stock so if you look at the two halves together more or less equal sales volumes but the year saw an increase quite a good increase in sales volumes over 2024 supported by feed price so feed prices in that half coming down nearly It was nearly 8%, in fact. But if you look at the year, feed prices went up marginally. So again, very distinct results in the second half to the full year picture. Full year picture, feed prices went up 19 rand a ton. Here they came down in that half quite significantly by 8%. That resulted in the full year profit for the year at 1247. So the salient points, now looking at the year in perspective, Poultry feed costs increased marginally. I've just spoken about that. And there was a lot of volatility through 2025 in the local suffix market. We managed to procure well, and we'll look at a chart to where the prices were later on. But we managed to procure well through the cycle that when we priced our feed in the second half, you know, the market had traded at very high levels through 2025. Anthony will tell you that Mays touched 5,700 rand a ton at a point. So when you have good positions and we are pricing the feed into the market at replacement cost, because every day you use the feed or the maize, you've got to buy more to replenish it. You have to manage that very well into the market so that you're not replacing your maize with much higher, well, you are placing with higher price positions, but we try and just hold on to any procurement benefits that we might have. On farm broiler performance has improved. So notwithstanding the slightly higher feed price, feed conversion efficiencies decreased. And that, as you will remember, is the amount of feed used for every kilo live weight gain. So we use less feed again this year for every kilo of live weight gain. And that basically nullified the impact, sorry, of the higher feed price through the year. So on farm broiler performance is looking good. We will look at those metrics later. As I've said, we increased our broiler placements and we sold what we produced. So we didn't produce it and put it in a freezer. Even through winter in the second half, we were able to sell what we produced with very manageable stock levels at year end. Poultry selling prices improved marginally. Year on year, the selling price movement was 2.4%. Again, stands in quite stark contrast to what happened in the second half where we managed to recover selling prices. to move those broiler margins back into positive territory. And we also benefited, and I think you'll see that in a slide later, from an improved product mix. Now that helped support the basket and better poultry selling process through the year. our feed division as you'll see reported very strong earnings they in this integration and something we will have to demonstrate to the competition commission when we talk about the poultry market inquiry is that an integration works for you it works in that you are able to support that poultry value chain through the year. Now our feed division obviously benefited from higher broiler placement numbers. They had higher internal feed production. So feed internally went up nearly 8%. But they also managed to sell more feed in the external market, which you always want to try and do. You want to grow your external market and fill up that spare capacity that you have in your feed mills. notwithstanding um you know the impact of ongoing diesel and water supply costs we still have a average 10 million rand a month bill for diesel and trucking water up and down 120 million rand for this year on the dot it's a significant cost and that's all about municipal interruption interruptions supply disruptions when you hear about national load shedding that's gone that's great you know you see that you don't see your lights going off any longer but the infrastructure in the municipalities needs a lot of work we did benefit though from the higher volumes and we can demonstrate that a bit later where the economies of scale have supported lower costs in the business lower operational costs per unit Stringent focus on working capital. I mean, we've kept our focus on that line throughout the year as we were in this rebuild phase of the balance sheet. Last year, we clawed all the debt back. This year, we set ourselves the task of building cash, healthy cash balance on the balance sheet that will stand us in good stead for any future headwinds that may come our way. And in the poultry industry, they do. You know, those of you that are very familiar with the volatility in earnings, you will see that we will see that somewhere. But at least we are well positioned to deal with it. then you all know about the cyber security incident in march only thing i want to say here is that there was no impact on integrity of the financial information there was a very thorough investigation forensic investigation that went into this by two companies and then the auditors deloitte went through this thoroughly and there was absolutely no impact fortunately on the integrity of the financial information or data in the business So we can stand here and say that the results we present you today are 100% untouched by some guy hiding in the shadows in Eastern Europe. Okay, for the year this is the movement and that's why I showed you the half and half earlier on because you don't see the impact of some of those key drivers in the second half if you look at just the year-on-year perspective. what you will see through this year though is the quality of earnings in 2025 improved we had a 250 million rand insurance recovery in 2024 and that was on the back of a number of natural disasters in 2023 bird flu floods and meadow feeds poll in the western cape at our feed mill and a hatchery in the western cape that burned down So recoveries in insurance there, which did boost the results in 2024. So you can see through the year, we got that assistance from selling price over the year with that recovery primarily coming in the second half. Volumes increased year on year as we placed more broilers, sold out of stock and increased our sales. We got the assistance from feed and the selling price and the benefit from feed conversion efficiency with our on-farm performances and the cyber incident we've spoken about. So all in all, an 11% increase in PBRT year in year. This is a slide that really tells a good picture together with the next one. You can see that in our first half of 2025, those margins under severe pressure, when we stood here in May, we reported margins here of minus 1.1%, certainly not sustainable, increasing to 3.9% for the second half. And I think if you reflect, we go back to 2022, that was a 3.5% margin and 5% margin and returning profitability at that time of one and a half billion. So certainly, you know, if you have the margins and you have the selling price and you have your cost base intact, there are drivers in this business that can support future earnings. We just, as you can see, and I've spoken of the volatility, I mean, you try, you know, we often get asked what's an average margin, what should we be penciling in? Well, If you, my guess would sometimes be as good as yours, you know, I think there's a lot of volatility in this and we're obviously going to try and keep it as best as we can above this line, the black line, but it depends on numerous factors, some of which are under our control, some of which are outside of our control, like this horrible year here. Broiler selling prices against food price inflation. So the poultry selling prices are in this basket, the food basket. you can see the price deflation that we recorded or reported on through from december 2023 all the way through till around april this year where we were able to get a selling price adjustment into the market and i just would like to point out that our selling prices now are on average at the same level as they were in December 2023. So with inflation and costs and everything in between, our selling prices now are not higher than they've been historically. So certainly not record highs for the selling price of chicken. And this, as you know, gets harder and harder to sell. to get into the market. Always a tough discussion with the retailers. And then, of course, we're always very wary and mindful of the pressure on consumers. This graph, we've always said, tells the whole story. If you had one graph you wanted to put up to tell you all what happened to Asheville through the year, this is it. Definitely a tale of two halves. So you can see that I've put a red block around that one. disappointing result in the first half but certainly a positive result in the second half which returned the business to a good level of earnings and financial performance just to remind everyone this is the month-on-month year-on-year movement in the broiler selling price and then the feed price so you can see the price deflation coming through quite strongly here in the first half at the same time off the back of a smaller maize crop in 2024 we had this we had higher feed prices we had spike the spike on suffix yellow maize at this time and we'll look at that graph a little later but we were able to procure well enough that our feed prices were softer through the second half but we certainly looked to get some improvement in selling prices to cover input costs. Otherwise, those negative margins would just reflect again on the scoreboard, which is not the business we're in. So on the raw materials, I'm not going to go through this whole balance sheet except to say that that's the small crop in 2024, relatively small crop, which led to higher prices for maize on Saffix and higher feed prices that we had through the first half of 2025. We then had the market, quite a lot of volatility in the market. The first Crop Estimate Committee report came out with a 13.9 million ton crop. The last report being the ninth report at 16.3 million tons. So through all of that uncertainty about the late planting, the late rains, the grade issues, everything that followed, there was a lot of volatility in maize prices. And we eventually reported or harvested a crop of 16.3 million tons. Now the progress Planting progress for the current crop is well above the five year average. Today we're sitting at about 44% planted. So good progress has been made on the planting of the current crop and we've had some good rains. So I expect and what we can see, we've moved into a La Nina weather pattern, which usually means good rains for Southern Africa. um and if these rains continue and it rains at the right times through the growing season there's no reason reason why the prospects for the maize crop that will be harvested in 2026 will not be any worse than this year that will support favorable maize prices into poultry feed in fact we believe that if we produce this crop You'll see the carry out increase, we should move closer to export parity pricing and it's probably about 200 rand a ton downside and that on July 26 contracts. which are trading at the moment about 3500 rand a ton so good levels for poultry feed, you can see the volatility through 2025 and the maize price. We had to choose your moments here where you wanted to buy, but certainly national position ourselves well through this volatility, we did not participate in this. Which is why you see the softer feed prices coming through in the second half and then more recently through the latter half of this financial year. or calendar year suffix has dropped quite dramatically on the back of the news of the big crop of 2025 and the prospects for 26 so. All you can do in this market is just keep buying. Hold a good position. As you know, we always have to have three months of maize in the pipeline. Here you keep buying and every day you buy, you can reduce your average price. In a falling market, don't always look as good as you could be. But if you don't buy, you're going to be waiting for some bottom that someone must tell you where it's going to be. And then you're really a speculator. You can see a little bit of an increase in the in suffix pricing just lately. And that was of some volatility in Chicago Board of Trade with funds taking up longer positions on corn. So, Emil, this is a story to tell. I mean, we've we really, you know, protein input prices are very good. We well positioned here. look where the market came off about two years ago at record highs 13 and a half thousand rand a ton you could flat price meal during the year now at six and a half thousand rand a ton good levels to feed chicken and then of course the randol exchange rate very stable which takes those shocks out of any movement that you or you will see some something coming through with shocks on chicago board of trade but with very good global a very good global coarse grain balance sheet. The world is not short of maize and soybeans right now. The US has had a good crop. They've harvested a good crop now. South America have had a good crop come off. South Africa's had a good crop come off. And you can see that Chicago's trading those fundamentals. Good global outlook, good local outlook for maize and soybeans. And then you have some stability in the Randall exchange rate, which brings that price relief for favorable pricing levels to Cephex. Very quickly on the feed division, revenue up here 9%. That was driven by an increase in sales volumes of 6.5% and selling prices up 0.6%. So that's selling price movement reflecting that increase in raw material costs across both years, not reflecting the softer feed prices in the second half. Operating profit up 31%. So you can see the momentum that comes through. You place more broilers on the end, They eat more feed. You get this big pull into the feed mills in astral and you have these volumes coming through. Then you add external volume growth to that. And this is you cover your fixed costs even better. You have better efficiencies in your feed mills coming through longer runs of all the broiler feed we make. And then this is the result. So to the feed division and the meadow feeds a really good result for the year and I think this we only saw something like this in 2023 when we had all of those feed volumes going to the feed division on the back of load shedding and the big bird era but the poultry division was suffering because of the cost. So this is really a true reflection of what the integration and business can do. Margins up to 6.6%. And expenses on a Rand per ton basis very well controlled. You can imagine what these volumes do. We've seen the graphs for these two, so I'm not going to cover that again. But the internal volumes up 8%, external volumes up 5.6%. And that growth was largely in the external poultry and pig feed sectors. So saw some nice growth there with some of that coming through in the Western Cape. Expenses well controlled. And again, we saw a net margin per ton increase in the division. So good return from them for the group. Sales mix here remained largely unchanged, still about 60% more or less internal feed and the balance going into the external market with a very important component in the other bean dairy making up about 25% of their sales. The poultry division will cover this in some detail. Revenue up 10% driven by volumes. and a little bit of selling price recovery at 2.4%. But if you look at the volume growth, nearly 8% in this division year on year, which has really supported a good performance and turnaround in this division. Reader revenue up 4.6%. We'll unpack that a little later. Now, when you look at this graph, you'd say, well, it's been a good year, but operating profit in poultry was down. That's where we come back again to that quality of earnings number. If you take out the hatchery fire and the bird flu insurance claim, which amounts to R231 million in this division, the underlying improvement in their results is just under 53% year on year without that one soft item in the insurance recovery. So a good result in the poultry division and certainly one that we're pleased with through the year. with all of that recovery coming through in the second half. You'll remember in the first half we had a negative PBRT here. We've already spoken about the margins. So the average broiler net margin over the year, one and a half percent. It still remains thin and vulnerable to any headwinds. one and a half percent margin if you look at that graph that we showed you earlier on is thin in the business and if you just have any shocks that comes under pressure again so a lot of focus then on rebuilding cash reserves which you'll see later this will go through the balance sheet in detail which sets us up in a stronger financial position than we were two years ago or that we were even in a year ago of course with higher volumes your variable expenses increased but those volumes assisted your overhead production costs your fixed costs and our per unit a kilogram production cost for every chicken produced came down slightly for the year so that's the benefit of scale the benefit of volumes in the business and then i finished good stock levels We've used the word substantially lower than at the end of 2024 because they are, in fact, they were substantially lower than they were then. With the higher production we have now filtering into the system, it's not sitting in a freezer and we are selling our production. By the end of this month, we'll surpass 6 million birds a week. This is a sales mix. So we spoke earlier on about a bit of of support from the product mix i'd like to just point out the iqf singles on higher volumes increasing in the year we still sold six percent into the qsr sector but on higher volumes we sold 13 of the mix in fresh but on higher volumes so we had growth in iqf we had growth in fresh we had growth in qsr we had growth in value added and within the iqf component we had growth in IQF single portions, which attracts a better NSV. So all in all, support from the product mix with that improvement in selling price. On the farming division, farming division again had a good year. If you look at Ross poultry breeders, our sales of parent stock decreased slightly year on year. That is because in 2024 we saw a recovery of parent breeding flocks around the country. So after bird flu in 2023, a number of our customers were restocking. There was quite a big pull on volumes from Ross poultry breeders in that year. And certainly once those flocks had been settled again and stabilized, the volumes in the market this year saw a more normalized level of parent stock sales into the market from rice poultry breeders. Certainly better demand for Dail chicks this year, and we were able to increase the sale of Dail chicks into the broiler market. Feed input costs increased marginally. We've spoken about how the feed conversion rate offset that increase. Broiler production efficiency is improved, once again demonstrating the good genetic potential in the ROS3 or 8 bird. If you couple that to good feeding practices, feeding programs and good on-farm management, you can generate again what we see as an all-time high reflecting in these broiler performances. And bird flu we'll speak a little bit about in the outlook, I won't cover it here. These are the broiler performances, all indexed of 2015. So weight and age, average daily gains were slightly up by one gram per bird per day over the life cycle of the broiler, but weight for age more or less the same as it was last year. You can see the live weight there, pretty flat, and the age, pretty flat. Where the benefit came through, though, and unfortunately, given the scale of the graph, it doesn't quite show as much as we'd like to, but feed conversion rates did improve in the year, and that's where we got the benefit in life cost from feeding these birds efficiently and producing more kilos of meat for every kilo of feed produced. PEF improving at an all-time high. Very quickly, some industry matters. A couple of topical points. Imports fell off quite a lot during the year, and that just had to do with bird flu around the world, and Brazil closing its borders to exports, or rather South Africa closing its borders to imports from Brazil, with the bird flu risk that presented itself there during the year. as soon as they open though the borders we've seen an increase again in imports and um we do understand there's quite a bit of chicken on the water i mean we should you know one needs then to look into the numbers i mean about 80 of that though is um is mdm and bone and portions and if you break that down further about 65 of that will be mdm and 15 bone and portions and the rest will be tertiary so um Year on year, actually a decrease in the import volumes, but really just as a result of Brazil's bird flu. The industry is still producing around 21.1 million birds a week. And if you add imports to that, they make up about 19% of local consumption. Bird flu we'll talk about in the outlook. It's still a risk. There's still outbreaks in the industry, unfortunately, and as early as last week, a further outbreak was reported. One point that is concerning for SARPA is the agarwood poultry import quota. That's about 72,000 tons per annum. That's free of the anti-dumping duty from the US. With the 30% tariff imposed by the US, And then the expiry of a goer, or notwithstanding the expiry of a goer, this quota should have already been removed, but it hasn't been. So we are taking this on a legal review with the Department of Trade and Industry and Competition. We believe they still are holding onto it to try and get a deal over the table with the US. We seem very far away from that if you read what's going on in the newspapers lately. and we trust they're not using chicken as a no pun intended a trump card but all we've asked for is a seat at the table we want to be part of that conversation if they give up anything on behalf of chicken in this country and then you all know about the poultry market inquiry and the final terms of reference that were published around that i'm going to hand over to dris ferreira now he'll take you through the financials in a lot more detail thank you thank you

something that i just need to quickly highlight here is the efficiency with which we record or convert that revenue line into an operating profit environment it's really a a very healthy operating environment with with the trim in the business coming through in the quality of earnings operating profit margin although it stayed flat at 5.5 percent really had a much better quality of operating profit As a result of the quality of the balance sheet improving, you'll notice that the finance charges line has improved tremendously year on year, from the R138 million cost to a R55 million cost, which includes the right of use liabilities, the right of use assets with the liabilities attached to it. Overall net finance cost has come down significantly year on year. We therefore recorded a profit before tax of R1.2 billion, 18 percent year on year and a profit from continuing operations up 16.4 percent at 876 million rand our headline earnings per share on a rand value 844 million and the main difference between the profit of 876 and the headline earnings of 844 being the disposal of some properties and ppe that generated a profit which we add back for headline earnings That leaves us with earnings per share of R22.76, up 16%, and headline earnings per share of R21.93, 14%. There we go. The group annual revenue all the way from where Astral listed in 2001 really tells us the story of an ever-increasing revenue line. And we've got them split into the different divisions, the gold bars showing the fee division revenue growth over the history of Astral, the blue bars the poultry division, and then the red line showing the group consolidated revenue. And again, just outlining there that hardly ever does the revenue in the group backtrack. We've got increasing profile in the revenue, which means we are always growing volumes and trying to recover price from the market as we've got the input costs coming into the business. It's a very important aspect to the business to recover the input costs, obviously to protect our net margin. and over time there's a significant um evidence of the of that ability to recover input costs if you look at the different divisions we've got 10.8 billion revenue in the fee division for this year and 18.8 billion revenue for the poultry division a group therefore coming in with a consolidated 22.6 billion we go annual operating profit recorded per segment or per division all the way again back to 2001 demonstrates the volatility of the group's profitability but if you look closer you'll see that the fee division really is the as we always refer to at the banker in our in our operating performance and that those are demonstrated with the gold bars you can see this year's operating profit from the fee division at 714 million going back in the history you will see that that's a very good performance poultry division demonstrated on the blue bars you can see the volatility really coming to you for in the poultry division and that really comes as a result of the fact that we've got feed cost pushes up and it always takes time to recover that from the market and therefore the poultry division becomes the ham in the sandwich so to speak operating profit for the group demonstrated on the red line and we've demonstrated here as an operating profit margin coming in at 5.5 again just referring back to the quality of the 5.5 versus the prior year's 5.5 percent and if you look back at the history of the group again as gary also outlined earlier you know the volatility trying to pick a number of the average margin is not that easy but um as he says you know your guess it could be as good as mine um but definitely a healthy margin at 5.5 percent and we have done better in the past um but also worse i think the reality is that um if you look at the the quality improving year on year it really bodes well for the for the foreseeable future if we unpack it into half year performances it really starts to outline the quality of the second half earnings for the group And I'd like to point out that $976 million trading profit for the six months, the second six months of this financial year, is the second best half-year reported profit in 50 cycles since the listing of Astral in 2001. So it really was a significantly strong performance for the six months. And evenly weighted or... well balanced, I should say, between feed division performance and poultry division performance. If you look at the green line and the red line, we really want to point out there that the green line reflecting the feed price change year on year, and the red line, the poultry selling price, the broiler selling prices into the market. As you can see, in the six months, we've had a reduction on the feed cost input and a recovery in the selling prices. And you can see how sensitive the poultry division is coming off a loss of 26 million in the first half to a profit of 559 million in the second half. I think one of the highlights of this year's results is the quality of our balance sheet. As Gary also outlined earlier, we were on a rebuild phase, a reset, refocus, restart for the last two years, being birthed out of 2023 dire environment that we operated in with the load shedding and the bird flu, which wiped our 2.2 billion Rand off our balance sheet. We concluded the rebuild this year. And if I can just quickly run through that, the equity line at the bottom of this table shows a 13 improvement in our nav in the group from 4.752 billion to 5.375 billion rand the main drivers beyond that if i can jump to the top of this table i'll run it through line by line our non-current assets our ppe improved by three percent showing that we are starting to spend on capital investment in the group, which drives efficiencies and ultimately improves the returns in the group. On non-current assets, our right of use assets, at least, has increased from 178 to 286. And that is coupled with slightly down on this table, the leads liabilities, which increased from 184 to 294. And that mainly relates to long-term leases, mainly relating also to the transport contracts that we run in the group. And there we've renewed a contract a year ago. You'll recall that a year ago we had a capital commitment of 125 million rand that we brought in for county fair. And that one has obviously been started in November last year. That is the increase in the right of use assets. Net working capital decreased by 11%. And that really demonstrates the quality of the working capital management in the group, coupled with the strong pull in the poultry division feed, for the poultry division finished inventory positions, which I'll unpack in a slide later. You'll notice the current assets is the big driver for that improvement, coming down from 4.872 billion to 4.61 billion, with current liabilities flat year on year. non-current liabilities mainly our deferred tax balance and borrowings that's in there up to any seven percent and that really demonstrates the deferred tax position that we have in the group where we have a lot of uh benefit from the the tax regulations because we are classified as a farming environment therefore the net assets Down 8%. Those are the productive assets that we engage in the business of which we generate our operating profit. And you can see that it's a really good story if you take the balance, the reduction of net assets and the improvement in quality of earnings. It really positions the quality of the financial statements all the way around. And therefore, the big story for the balance sheet is the fact that we restored our net cash balance. We managed to generate a net position of R1 billion in the year. after everything considered and we moved from 13 million cash a year ago to 1 billion and 13 million the end of september 2025. capital expenditure appreciation and amortization for the group 331 million see a slight increase here on here two buckets driving that one ppe property plant and equipment at 241 and the right of use assets which we touched on earlier 90 million The total capex, however, is up strongly year on year, and that number is expected to be even stronger for the period lying ahead as we start to reactivate our investment programs after the reset, refocus and restart cycle that we've been through. But also linking that 336 total capex number to the total depreciation, you'll see that we are very much in line with our depreciation for the year. If you look at the breakdown of that into the placement and expansion, you can see that the replacement capex or the maintenance capex in the group has received a lot of attention, and that will improve over the period lying ahead in the foreseeable future, and we expect a strong total capital expenditure number there that will drive efficiencies and productivity. Outstanding commitments at reporting date, 159 million. The main items in there, there's quite a lot of items in there that makes it up. We've got a lot of capital projects undergo at the moment. But the two ones that stand out is really the refrigeration upgrade at Goldie, which increases our capacity. As Gary said, we will, by the end of this month, be just north of 6 million broilers per week being slaughtered. And that is the one activating that profile. And then also we're increasing our hatchery capacity. On the working capital, really a good story to witness here is the current assets coming down by 262 million in total. The main drivers of that being the poultry inventory. You can see they're coming down from 1.169 billion to 682 million rand, an improvement of 487 million rand in cash coming into the balance sheet. The fee division inventory position has improved by 42 million rand. And the trade debtors, although an increase of 294, it's a healthy increase. We really run an exceptionally clean debtors book in the group, running at a very good profile. All the debtors there is collected. We're really sitting with just about no debtors outstanding beyond due dates. So really an exceptional performance by the credit control team. Current liabilities, as I said earlier, flat year on year. networking capital therefore improving by 262 million on the cash flow really clearly demonstrated with this waterfall graph coming into this financial year with 13 million rand cash on the balance sheet net generating 1.5 billion cash operating profit working capital changes of 276 You'll notice the difference from the previous slide. It's really the I4S application in terms of what working capital changes needs to be rolled back into that cash operating profit profile. And then we've got proceeds from the sale of assets, which I touched on on the income statement, being the difference in the headline earnings per share versus EPS earnings per share. So there's a cash proceeds of 69 that generated a profit profile. that needs to be added back and then we've got tax paid 127 again the difference between that and the tax charge really relate driving that deferred tax liability on the balance sheet and then we've got capital expenditure paid in cash 328 million and then the resumption of dividends at the end of last year with our final dividend being declared of 520 an interim dividend in the in the first half of the of 220 translating into a cash payment of 285 to shareholders closing off with 1 billion and 13 million on the balance sheet in cash. headline earnings per share history. Again, you can see the full history here. Some volatility in the number. We all know where that comes from. But I think the story to be identified here is the fact we're paying an 11 rand dividend this year, which is a two times cover of our 21 rand 93 headline earnings per share number that we generated for the year. In summary, We've managed to convert our revenue into profitability on a very clean basis, and that generated significant cash inflow of a billion rand net for the year, which we could use to redeploy into reinvestment in the business, our capital expenditure profile at 336 and returning 8 rand 80 in the final dividend to share all this. Thank you.

Thank you, Dries. Good. Well, thank you, Dries, for unpacking the numbers a bit further for us. As usual, we'll give investors a view of how we see the near-term future and balance that. There we go. Just bang it. balance that with some slightly negative aspects that we see out there. I don't think we can stand here and be completely negative about the future. Otherwise, Anthony is going to look at me and say, you're playing your poker face. But certainly there are some aspects out there that still concern us. And the number one risk in the group remains bird flu. I think we must be ever mindful of that. There was an outbreak in KwaZulu-Natal just a week ago. And we are starting to see more and more, and this is across the globe, that this isn't just a winter disease. You know, you're seeing it in summer now on the weekend in the press, they were reporting an outbreak in African penguins. So just off the coast here, which is concerning. So certainly not a winter disease any longer. And there has been slow progress on vaccination. You remember we reported that we had approval to vaccinate one farm. We received that earlier in the year, which is about 5% of our breeding stock. There was a word in here on Friday that said with very slow progress. And then at about four o'clock on Friday afternoon, Dr. Beto Kele, our head veterinarian, dropped us a call and said, guess what? We've just received another two permits for vaccination. So we took very out just to change it to slow progress because it has been rather slow. Even though we now have approval and we'll look at the timing of that, but we have the ability now with those approvals received to vaccinate up to 30% of our breeding stock. And in the absence of compensation, still an ongoing battle with the Department of Agriculture, and in the absence of insurance, Good biosecurity and vaccination as a tool and a toolkit is what we have to manage the disease. So under very controlled conditions, we've been allowed to vaccinate. Certainly not supporting blanket wholesale vaccination across the industry because that comes with other risks. But under controlled conditions, we are applying a vaccination strategy to deal with bird flu. economic growth outlook does remain subdued i mean notwithstanding some positive signs we've seen uh in the week they're talking about a possible interest rate cut and the monetary policy committee getting together soon to look at that that will have um It does bring some relief to consumers, but I think on the larger front, we need to see growth and development in the country that will create jobs. Without jobs, unemployment remains persistently high, and that just places additional pressure on household disposable income. So we that hasn't gone away and it might seem a bit laborious us reporting it here, but it is a fact, and we need jobs in the country, so that people can buy a better food basket and which ultimately protein in the in the form of chicken. The AGOA preferential trade access we spoke about that earlier on, you know this quota is still in play. and uh we are not sure what will happen with that with time will tell although we keep on letting the minister know that we're here and we're available to chat to him but certainly the tariffs at 30 percent and the and ago are falling away will have negative consequences for the country a small reprieve for the citrus sector on friday was that president trump signed an executive order exempting south african citrus from The tariffs, they're a bit short on oranges and apples all of a sudden. So he's now signed that so that our fruit at least can flow into the US. Three of those tariffs that he's imposed. So that's a small positive sign for that sector in South Africa. And then the poultry market inquiry was launched. It's very wide in scope. It's dealing from every point in the poultry integrated value chain, from genetics all the way through to the retail sector. It's very wide in scope and it'll take time to conclude and we're not sure what the outcomes will be. I mean, there's a number of these market inquiries that have been conducted over the years. There are recommendations that are made. Time will tell what that means for our industry. What they're looking at is barriers to entry. They want to try and establish why we have large integrated poultry producers. How does economies of scale benefit poultry production in the country? But we're not unlike any other poultry market across the world in terms of how we produce chicken. So anyway, we'll engage this process positively and we'll wait for those outcomes. We put it on the slide as a little bit of a negative because it is going to take up time and it remains something a little uncertain. I think this... Can we just move to the next slide manually, please? Thank you. On the positive side, as we've already covered, maize prices are favorable and we expect them to remain favorable unless it just doesn't rain in January and February next year and completely dries up, which we don't expect with the outlook that we have on the weather patterns. We are in a La Nina phase right now. We've moved into that and we expect that to continue through the South African growing season. So we've had a large harvest in 2025 and a large harvest is expected in 2026, but we've still got a long way to go. A lot of water under the bridge to go, as I say, and we'll keep a close eye on the weather and other metrics there in our procurement strategy. We have increased and are able by the end of this month to increase astral production volumes again. This does positively benefit economies of scale. as long as we can sell it. And the market seems to be very well balanced in terms of supply and demand at the moment. And we are moving into a festive period. And, you know, we have this ability or we had this ability to bring these additional volumes to market through the large capital expenditure program we embarked on a few years ago to increase our capacity by 16%. So we were always well positioned with that. And that has supported growth in the retail and quick service restaurant sectors. You know, you see quite aggressive growth there with store rollouts on a monthly basis. And fortunately, they're all looking for chicken. Investment in process and product innovation. Some of this is happening as we speak. And there's a couple of nice projects in here or good projects in here, which will enhance our manufacturing capabilities. support efficiencies in the business, and will also lead to a product mix, well-balanced product mix. And certainly not indicating there that we're moving away from any one part of that product mix, just balancing that market well. And there are products outside of that that we use in the integrated value chain that are not necessarily just chicken in the bag at the end of the day, but also ingredients that we produce that support a better feeding cost. As Shil stated, strategy hasn't changed. Our board reconfirmed this in February at our strategic planning workshop. We are the best cost producer or will endeavor to remain the best cost producer. And we're just keeping that steadfast focus on efficiencies. And all my colleagues will know that we keep on having this conversation. And we do have a group-wide awareness campaign around this, which we will keep on talking about because it's critically important that we streamline all our objectives to support this. Without the best cost producer strategy, we cannot be a supplier of affordable protein to the country. And then we have a healthy balance sheet, which is spoken a lot about this does obviously lend support to key strategic capital investments, which will bring cost benefits improve efficiencies and then we must always look at how we will drive volume growth into the future for this. Some positives on the outlook and certainly. um lend themselves to supporting the earnings in the business if we can just go i think this is died thank you i'd like to thank you for your attention today um from my side thank you to all my colleagues in astral and these are your results without all the hard work that all of you put in every day certainly wouldn't be possible so you know enjoy the moment this is um your report card and scorecard and it looks good. And then, as you know, Dries is moving on to the industrial sector. I think after three years, he didn't, he thought he had enough of poultry. But Dries, best wishes and thank you for your support. Told you, sorry to see you go, but good luck. Best wishes. Thank you.

money so we change any questions so we'll take questions from the floor first any morning um in terms of your second half sales increase is there a correlation as a result of one of the competitors closing down or going into business rescue? Or is it a function more that the consumer with interest rate environment started consuming more chicken?

No, there's a correlation with the industry consolidation that you see. I think everyone picked up some volumes there. We were in the fortunate position that we had capacity to do it. um and it's got more to do with the fact that the country still needs to produce the 21.1 21.3 million birds a week so we have participated in that but there's also been growth in the retail uh wholesale and quick service restaurant sectors um one thing i can say and we believe it does support volume growth through that through that period as well as that foot and mouth disease took hold in this country quite severely through the And you'll see the alien beef prices. If you go later into the slides, we've got all the additional information. Beef prices rocketed in the year on the back of foot and mouth disease and the quarantine of livestock there in the feedlots. So certainly that may have played a role as well in supporting the volumes in chicken and poultry. um people still buying protein meat to eat and those that couldn't afford to buy beef the next next best thing is then chicken so we do believe that played a role as well in in the pool that we've seen for chicken through winter which was traditionally your slower season we certainly didn't see that drop off on fresher but yes but not on frozen thanks then my second question is then

as a result of that volume increase because of that event, is the price increase the same as we know that that entity was selling chicken at a loss previously, which was bringing the whole market down?

So, I mean, I think that points to some of the recovery in selling price through the second half. I mean, as you've rightly said, there was the market pricing and the market was suppressed, particularly through the latter half of 2024. very competitive environment for frozen chicken. And, you know, there were prices out there that just were not recovering input costs. And our responsibility is to recover input costs. And I think we've managed to achieve that through the second half, which reflects in the margins. Anything else online, Moniz?

No, there are no questions, Gary.

Okay, then we've done a pretty good job of covering it all. I'd like to thank you all again for attending, especially all of those. There's a last question, a last entry.

Cheryl Hose from Vatalia Capital. When we review the FMB agri-data report, it seems last year's broiler price realization lags the data published in the report. Can you comment on poultry pricing achieved and how we should review the data released by FMB? Similarly, CPI data point to more muted price increase in poultry selling. Is this the more correct number to monitor?

With all honesty, I don't know a lot about the F&B data that you're referring to. I mean, we use some of it in a later slide, but in other proteins, if I could just give you some advice, refer to the SARPA average selling prices that are published in their production reports. They take information from the whole sector, goes through a third party, Chinese walls, it's assembled, put together, probably a very reliable source of information when it comes to selling price trends. I'm not saying the F&B data is not. I just don't know the source. It could be on shelf pricing or not. But the producer pricing that we provide, I think, is a reliable source. And you'll see that that is included in a slide later on in the show.

The second question, the balance sheet is strong with improved cash generation expected. How do we view the potential for special dividends in the short term?

The board has, as you know, taken a decision to declare dividend, final dividend at two times cover. And that was with cognizance of our CapEx program going forward. I think the first task for us as a team was to rebuild the balance sheet. um we've just done that so certainly not walking out of that immediately thinking about special dividends but looking at a project pipeline where we have as well you'll see the capex through 2024 and we had to pull the reins back a bit with the cash that we bled from the business in 23 and 24 was a rebuild phase so certainly you know we we have good places to spend the money We will apply those funds wisely. And again, there's a lot of projects in there that will benefit the business going forward and improve earnings over the longer term. So we should look at that first. And then it depends on the cash. We'll make those decisions as and when necessary with the board. But certainly no shortage of projects right now that we don't need the cash. So not looking to dish it out too soon.

Thank you. His third question. Can you provide a poultry volume target for full year 2026? And what percentage increase do you target?

Look, I can't. You know, I don't think we can stay. Marlies will kill me if I give you a forecast like that. We're going to produce, as we've said, six million broilers a week. We must sell that. You know, it's no good we produce it and put it in a freezer. So it's going to depend largely on market conditions through the year. We are only in the second month of our new financial year. We're going into the festive period. So good demand at that time. But normally in January and February, with all the obligations that families have towards school fees and everything else, and spent all their money through Christmas, you do see a softening in the market. So we've always said we must balance our supply with demand. And we're not going to be reckless about that. And there's always a lead time to that. It's at least eight weeks, an eight-week window we have to look into to balance it. But certainly we'll need to, I can't just say we're going to keep on producing and keep on selling. There needs to be that pull from the market.

Thank you. Roger from Excelsior Capital. Do you expect imports to drive pricing pressure going forward with cost dropping and the RAND being strong?

depends on the what's in those imports you know mdm makes up a large portion of that really because the country doesn't produce it mechanically debone meat we sell the whole carcass strip carcass so we don't produce mdm here and that continues to be the largest portion of those imports with bone and portions making up some of it and then offal or tertiaries making up the rest It depends what happens to the volumes around imports. I think we should remember that we now as a country have an anti-dumping duty in place against Brazil and four European countries. The AGOA quota should be removed. The US are having a bad time of bird flu, so hardly any chicken coming out of the US to South Africa. Countries are opening and closing as bird flu hits their borders. So it's quite a disrupted, quite disrupted trade flows at the moment. And most of the imports are coming out of Brazil. And again, a lot of that is MDM. So difficult to say that there'll be this flood of imports and it's going to impact pricing in the country, we have a MFN duty in most favored nation duty plus anti dumping duty against Brazil, which was implemented, you know, a couple of years ago already. And that's a better position to be and then we were a few years ago.

Thank you shall host. Would you like to extend your feed procurement beyond three months given favorable feed input costs?

We've got a procurement committee that looks at all the inputs, the technical data, the weather recommendations from the trade and our suppliers. And we take a view. So certainly, if we need to take a longer position, we do that. We will determine what that strategy will be. And then we've got a daily procurement execution team that will go and fill that book. Our minimum coverage there is three months in the pipeline. That's really just to get physical deliveries to the mills. But certainly, we do from time to time hold a longer position than that. And in the maize market like we're currently pricing, I don't think it's unreasonable to expect to hold a longer position.

Thank you. We've got an audio question from Thabo Nkapindi.

Good morning. I'm not sure if I'm audible.

You are?

Yep. Good morning. We can hear you. from the University of Johannesburg. I'm doing my PhD research specifically on feed efficiency and antimicrobial resistance, which focuses on multi-omics in poultry systems. My question is for the leadership and also congratulations. I've also sent my congratulations also to the team as well on the impressive turnaround and the strong cash position. My question is on research and development. because I have noticed that it was also mentioned throughout your impressive presentation. Given that the feed cost represents 66% of your production cost, your single largest expense at the moment, could you outline the specific research and development initiatives prioritizing to systematically reducing this cost burden and to protect your margins. I'm particularly interested in the role in advanced nutritional science, so if I can just understand the priorities in terms of research development in that regard.

Thank you for the question and the well wishes. Certainly, I mean, we have an ongoing research and development program. We've got a broad team of nutritionists in the group. We've got veterinarians in the group that are constantly working on feeding programs and feeding specifications to exploit, or maybe a better word is... What's the word I'm looking for? you know, is to get the best genetic potential that exists in the bird in performance out of that animal. So, you know, we do have in-house R&D, we do have in-house testing facilities, and we are constantly testing feeding programs and developments in nutritional science with new ingredients, feed ingredients out there and such to improve our our performance, broiler performances, and thereby support a better feed conversion efficiency. But certainly something that, you know, you're welcome. We can always set up some engagement with our nutritionists to explore this a bit further.

Thank you.

Hello. Yeah, I was saying that, like, have you also looked into maybe collaborating with, considering maybe like this, what you have already presented, as ASTRAL maybe considered collaborating innovation models with like universities and institutions, particularly like with the feed industry, with the feed sector, AMR reduction, as well as precision maybe nutrition trials. even though you have your in-house and also maybe collaborating with academia?

Yeah, we do collaborate with academic institutions, both locally and abroad. So we draw on technical know-how abroad and research has performed overseas as well as locally. And we do have relationships with a number of local tertiary institutions. Thank you so much.

Thank you. Harold Sigourley, given the financial results, what is your view on reinvesting profits versus cost containment for the coming financial year?

Cost containment is a continuous focus point and that starts with managing the business right. We will always look at opportunities to reinvest profits. Obviously, we want to as long as possible, keep on rewarding shareholders as long as there's profits there to do that. And then if there's profits there, we need to reinvest them back in the business. It's a large business, requires a lot of repairs and maintenance and capital expenditure in maintaining our upkeep of our assets. We are custodian of these assets, so we need to look after them. And then certainly exploiting opportunities to improve costs and efficiencies.

Thank you. There are no further questions.

Thank you, Marlies. Thank you, everyone. Appreciate your time today and your attendance and go well. Best wishes. Thank you.