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July 16, 2024
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Electricity, water woes lead to sharp plunge in poultry group’s profits

Failing infrastructure and the lack of service delivery from a “government that is asleep at the wheel” is placing a massive cost burden on businesses and consumers.

This is according to the Astral Foods group, which on Monday disclosed a 88% decline in operating profit to R98m for the six months to end March this year, during which it incurred R741m in load-shedding costs.

Poor service delivery from government and policy uncertainty are cited as factors considered by management to have an impact on the company’s near future business outlook, alongside an expected period of political instability in the lead-up to the 2024 national elections.

“The macroeconomic crisis in the country with negligible to no economic growth, is hampering any prospects for job creation, with disposable income under severe pressure as the cost of living crisis deepens and a recession looms large,” Astral said in its results statement.

“The dramatic demise of Eskom in the generation and distribution of electricity, of water affairs and the failing water supply networks, together with the disastrous state of Transnet, have destroyed the capacity of the agricultural sector to function efficiently and has hence become globally cost uncompetitive.

“The continuous costly disruptions to agri-processing businesses and the integrated food production value chains have left South Africa with deepening hunger and poverty levels, especially among the most vulnerable of communities, and an even greater threat to food security is plausible.”

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