Power cuts hit poultry producers

South Africa’s poultry producers are among the industries impacted by the high levels of national power cuts the country has experienced this year. Though the outages, known as load shedding, have decreased recently, the effect continues to show in companies’ financial statements.

In May, the country’s largest poultry producer, Astral Foods, reported an 88% drop in operating profit for the first six months of its financial year. It spelled out the R741 million cost of load shedding over that period, including R1 million worth of diesel a day to power the generators it has bought.

The second-largest producer, RCL Foods, owner of Rainbow Chickens, has just issued a trading statement looking ahead to its year-end results announcement in September.

RCL said it expected earnings per share to at least 30% lower than the previous year. The reasons included “the significant impact of load shedding across all operations in the current period, and unrecovered feed costs at Rainbow”. Astral and RCL are listed companies, required to publish their results. Their woes will be indicative of the suffering of other large producers, and the many small-scale farmers who have gone out of business because of rising costs, including load shedding.