Quantum Foods Holdings Limited, a leading player in South Africa’s poultry industry, has released a comprehensive operational update for the four months ending on January 31, 2024. Despite facing challenges from the Highly Pathogenic Avian Influenza (HPAI) outbreak in 2023, the company showcased improvements in various segments of its operations.
Trading Conditions Improve Amidst HPAI Impact
Quantum Foods experienced a notable improvement in trading conditions during the current period compared to the previous year. Reductions in feed raw material costs and operational expenses, coupled with fewer loadshedding hours, contributed to margin enhancement despite the lingering impact of HPAI.
HPAI Continues to Pose Challenges in Layer Farming and Egg Businesses
The company reported further outbreaks of HPAI among South African producers, impacting Quantum Foods’ layer farm operations in the Northern Provinces. The financial toll of these outbreaks amounted to approximately R37 million. Despite these setbacks, Quantum Foods made strides in rebuilding its layer breeder flock, emphasizing stringent protocols and measures to mitigate disease risks.
| Metrics | Current Period | Previous Period |
|---|---|---|
| Egg Supply | 60% lower | – |
| Egg Prices Increase | 60% | – |
| Total Day-Old Chick Production | 1% lower | – |
Broiler Farming Shows Signs of Recovery
In the Western Cape, Quantum Foods saw significant improvements in the operational and financial performance of its broiler farming operations. Migration from Cobb500 to Ross 308 genetics was completed, resulting in enhanced efficiencies. However, the Hartbeespoort farm remained dormant due to the HPAI outbreak in the previous year, impacting hatching egg supply. Despite this, live broiler volumes increased by approximately 6%.
Feed Business Sustains Satisfactory Performance
Quantum Foods’ feed business delivered satisfactory results despite a reduction in poultry feed volumes, mainly due to the HPAI outbreak in 2023. Total feed volumes supplied decreased by around 14% compared to the previous period, yet the segment maintained operational and financial stability.
Mixed Fortunes in Other African Operations
While trading conditions in Zambia were adversely affected by increased maize costs, Quantum Foods witnessed improved demand for its products in Uganda due to lower feed raw material expenses. In Mozambique, egg selling prices surged following reduced supply from South Africa. Overall, the company’s other African operations rebounded well from previous financial challenges, contributing positively to the current period’s performance.
Financial Outlook and Government Intervention
Quantum Foods anticipates continued challenges from HPAI for the remainder of the financial year ending September 30, 2024. The South African Government has published stringent protocols for voluntary vaccination against HPAI, with ongoing efforts to register the required vaccines.
The financial information provided in this update is solely the responsibility of Quantum Foods’ directors and has not been reviewed or audited by external auditors.
Conclusion
Despite persistent challenges posed by HPAI, Quantum Foods Holdings Limited demonstrated resilience and adaptability in navigating the poultry industry landscape. With strategic measures in place and cautious optimism for the future, the company aims to sustain its operational momentum and deliver value to stakeholders amidst prevailing uncertainties.
