Good day, ladies and gentlemen, and welcome to the Astral Foods Final Results Presentation for the year ended 30 September 2021. All attendees will be in listen only mode. There will be an opportunity to ask questions when prompted. If you should need assistance during the call, please signal operator by pressing star and then zero. Please note that this event is being recorded. I'd now to hand the conference over to Mr. Schutte. Please go ahead, sir.
Thank you. Thank you for everybody taking interest in Astral and having a run through our FY 2021 financial results. With me in the room, I have the Astral executive team. I've got Frans van Heerden, Michael Schmitz, Gary Arnold, and Daan Ferreira. Also, thanks to my chairman, Dr. Theunis Eloff, for joining us this morning. If we move over to the salient points that impacted the business during the year. Of course, it's well known that the high commodity prices, soft commodities, have negatively impacted our feed input costs, and that increased over the period on high maize prices driven by global fundamentals in coarse grain markets, mainly fueled by the demand from China. Also, our broiler production efficiencies were impacted, but that was due to a management decision changing the feed regime due to the higher raw material costs.
We took a decision to tone down the feed or to lower the octane in the feed. Poultry selling prices recovered to pre-COVID levels in the second half of the reporting period, partially offsetting the markedly higher input costs. Especially in the fourth quarter, July to September, we had positive pricing trends with a more stabilized raw material cost. We also had extraordinary costs during this period that impacted most probably every agricultural business in South Africa. Besides that, we also had the outbreak of bird flu. The last big outbreak was in 2017, and this one impacted us to date as we sit here to a lesser impact than the previous time. What we also had, another challenge this year, was the unrest and the looting together with load shedding.
Of course, the well-reported poor municipal service delivery issues, especially at our Goldi plant in Standerton or Lekwa. We have continued high levels of poultry imports. There was a slightly lower level this year at about 37,000 tons per month versus 40,000 tons, down 8%. Gary will talk later about it. There's a lot of claims that it's about the higher import duty, and we obviously have got a different view on that it wasn't just because of the Master Plan. There were a lot of different scenarios that had a negative impact on this. Daan will give more detail on the disposal of Astral's interest in Swaziland or Eswatini and in Mozambique. That asset's up for sale. Daan will give you the detail about it.
We were approached by potential buyers in Swaziland. We sold out to our minority shareholder who's a local producer there. In Mozambique, we're busy finalizing the negotiations of our feed mill and hatchery there. Then I think if you look at the results and with all the headwinds and the massive impact on our production costs due to the higher raw material costs, I think we can still sit here today and talk about a resilient financial performance under extremely tough operational conditions. If you look at slide number five, just a quick view. Revenue increased to ZAR 15.9 billion, up 14%. Again, Dan will report on the impact of the discontinued operations.
Profit before interest and tax down 12% to a level of ZAR 731 million, including discontinued operations or 711 excluding those, which we, with all the headwinds, believe was a fair result for the year. Profit for the period down 15% at ZAR 473 million. The headline earnings at more or less the same level. I think maybe a bit of a positive is the final dividend declared attested by the board from an affordability and cash position at ZAR 7.00 total for the year. ZAR 3.00 for the first half and ZAR 4.00 for the second half. Slide number six, a divisional overview.
On the Feed Division, raw material costs up sharply. Maize they are about 23% and soya is the same level for the year, and they contribute the biggest part of the feeding cost, which again is the biggest part of our total cost at about 68%. Our internal feed requirements increased. Two reasons for that. We changed the feeding regime, which demands slightly more feed to produce a kilogram of meat. Then we also had higher placements on the back of the Olifantsfontein or Festive expansions. External sales volumes down slightly. We didn't wanna participate in a price war with competitors due to credit risk and, especially down in the dairy sector. Expenses, again, well controlled by this Feed Division, the same as every year, up about 4% in line or even better than inflation.
That's what Astral is about to feed the best ration at the lowest cost to the best genetics and produce the cheapest kilogram of meat protein in South Africa. Again, we had improved rand per ton margin in the feed division. Obviously, if you look at the percentages based on the higher price driven by higher raw material costs, the percentage would decline slightly, the margin percentage, but on a rand per ton basis, again, another improvement. On the poultry side, we made mention of the feeding program change. We lowered the specs because of the high input costs, but there were still fiscal benefits. Broiler performance hence was impacted and a slightly different feed conversion rate. Very slight, but it cost us about 17 grams of feed to produce a kilo of meat.
Again, a management decision. There was a net benefit from that. Broiler sales prices or realization up over the year. In the first three quarters of the year, we tried just to recover the higher input costs, and we'll see that in the next slide. In the fourth quarter, there was another feed price increase where that assisted our profitability in the poultry division, especially from July, August, and September onwards. Broiler sales volumes also increased. We communicated a lot about our expansion in Olifantsfontein, which at one point in time was frowned upon. How do you expand your volumes and your production if there's a bit of an oversupply of chicken? Maybe by default it was the right decision and the timing was spot on. We're busy capitalizing on that volume expansion in Olifantsfontein.
We also sold out of stock. As we sit here today, our stock level is slightly lower than a year ago. Non-feed costs. We talk about the increase in the raw material and the feed cost, and then we also highlight the non-feed costs. Again, a very good show there from the Astral Feed and the Poultry division, up about 4% just below inflation. On other Africa, two of those operations up for sale and the fourth one, Zambia, had a marked improvement in their financial performance year-on-year. I think maybe the slide that gives the best one page reflection on what has happened in the poultry industry, especially in Astral. The yellow colors is the year-on-year change of broiler feed pricing.
We can see in the last 2 years there was a consistent increase in feed costs compared to the prior year and at a much more rapid rate than what the blue blocks indicate, which was the change year-on-year of broiler selling prices. You can see the last six months, the blue bars indicate the improvements year-on-year on poultry selling prices, and that was what I just referred to, whilst raw material or feed prices came off on its year-to-year increase. If you look at the blip right at the end, in the last two months, the poultry selling prices increased at a quicker rate than the change in the feed price.
That's why we had a very strong third, fourth quarter in our financials, something that we at one stage in time at interim were not sure about that it could realize. Slide number eight. Waterfall quick view. Compare the blue bar on the left. FY 2020's PBIT at ZAR 813. Again, what we state here, if you look at the footnote at the top, it excludes discontinued operations. The same for FY 2020. It's apples with apples. The 813 versus the blue bar on the right at 711, approximately ZAR 100 million down year-on-year. What is in the green and the red is what brought about this lower profitability. The red bar on the left, ZAR 796. That's what we paid more for our raw material cost in the group.
The small bar next to it was a feed conversion efficiency. Then on the green small bar is the broiler feed change. The benefit from changing the feed regime outstripped the feed negative feed conversion efficiency. Broiler sales volumes benefit both from selling out of stock and the increased production and processing brought about a profit, and that most of that was in the fourth quarter in the ZAR 125 million benefit from higher volumes and stock. The selling prices increases. We had four increases during the year. Three of those was an attempt to recover the red bar on the left to feed raw material costs. More or less in line, we did manage very close to recovering all the feed input costs.
On the right again, because of extraordinary costs, and then the other block, all the other operations put together and our total expenses for the group down ZAR 176 million, and that explains the ZAR 100 million profit difference between FY 2020 and FY 2021. In the extraordinary costs, of course, we have the impact of the bird flu or avian influenza to the value of about ZAR 49 million. We have load shedding costs, we have looting and COVID costs. Some of them are offset, and at a lower rate than the prior year. This is the change in that extraordinary cost. With that, I hand over to Gary Arnold to give a view of a raw material position in South Africa that impacted us and also maybe a view going forward from a maize supply and demand context. Gary, over to you.
Thank you, Chris. Good morning, all. We'll take a quick look at the South African balance sheet for maize, and I won't dwell on this too long. I just wanna point out one or two factors here which are important when we talk about SAFEX maize pricing on the next slide. The 2020/2021 harvest at 16.2 million tons. As you can see, that's a good crop. It's the largest crop in the last four years. A good crop for South Africa. Notwithstanding this good crop, we've seen near record high SAFEX maize prices, and we'll talk a little bit more about that on the next slide.
For this year though, high exports, very good level of exports, notwithstanding the port issues that we experienced during the year with the violence and looting and then the Transnet shutdown on the back of the cyberattack. We still managed as a country to export very high level of maize, resulting in a stock to use ratio of 14.7%. Now based on our maize price model, that 14.7% should reflect on local fundamentals a maize price of around ZAR 2,800 a ton, given historical maize pricing trends and stock to use ratio. We however did not see that. SAFEX maize prices were supported by global fundamentals on the coarse grain markets, and again, I'll spend time on that on the next slide.
Just to point out though, we currently have a La Niña weather pattern that we're experiencing which means good rainfall for South Africa. At the very least, we're expecting a 15.8 million ton crop for 2022, but this has a lot of upside potential. Planting progress at the moment is good. The country currently sits at 35% planting progress on this crop, and that's against the prior year at 19%, a 5-year average of 18% and the best planting progress at this time of 23%. This crop is growing into the ground very well. It's at 90% progress in Mpumalanga with the Free State now picking up, particularly in the east. On this crop, and that again I think is a worst-case scenario, although we have quite a way to go before this crop comes off.
We are estimating a stock to use ratio in the new year of 14.9%. Again, pointing to a lower SAFEX maize price based on local fundamentals. Looking at the maize price history on SAFEX, you can see the past year almost a new level, but a lot of volatility in this pricing makes buying decisions somewhat difficult. We have through the year timed our purchases fairly well, buying on the bottoms and managing to stay out of the market at the peaks. This represents year-on-year about 600 ZAR per ton increase in the maize price and you can see that. The last rally that we saw in Safex was through the last two weeks.
That was driven by the demand for corn in the US on the back of record margins in ethanol production. The demand for corn for ethanol production is very high. As people return to work or return to the office in the US, energy demand has ticked up. This did come as somewhat of a surprise, I think, to the market, as we were expecting corn to move down towards $5 the bushel. It got very close, $5.08, but it's been trending a lot higher recently. This graph just compares SAFEX yellow maize price versus Chicago in rand terms. You can see that it reflects South African maize, still slightly more expensive than Chicago corn, about 100 rand off. We are trending slightly above export parity.
Based on today's export parities, March futures are very close to export parity. We do expect some downside or small slight downside in the SAFEX maize price. I think as our planting progresses and the crop emerges, and hopefully we get the rains that we're expecting, there should be some downside in this maize price. Still a long way to go there. Soy meal reached a peak of just under ZAR 10,000 a ton during the year. That was going into the feed price in the first half of our financial year. You can see that soy meal prices came up quite nicely. Chicago futures came down. The rand strengthened for a period in the year.
Premiums came off their highs, so we were able to fix our soy shipments and usage at much better pricing levels than that 10,000 ZAR a ton we saw in the first quarter of this financial year. That did help the feed prices somewhat, which you saw on the graph that Chris presented earlier. However, more recently, soy futures have again increased, pulled up by maize and by demand in China. I think one positive here is, though, that all eyes are on the South American crop at the moment. The U.S. crop is pretty much at about 89% harvesting. The U.S. crop is pretty much off the fields. But all eyes on the South American crop in Argentina and Brazil. They've seen, notwithstanding La Niña, some good weather and rain.
Those crops are looking okay. I'll now hand over to Michael Schmitz on the Feed Division. He will give us an overview. Thank you, Michael.
Thank you, Michael. Michael, the MD of the Feed Division, will give a quick overview of the Feed Division's performance.
Thanks very much, Chris, and good morning, everybody. An overview of the feed division's results has revenue increasing by 18.9% from ZAR 7 billion to ZAR 8.3 billion. This was driven due to the increase in raw material costs, mainly maize and soya. As a result of that, the average selling price increased by 16.6%. Sales volumes were up 2%, which further supported that increase in revenue of 18.9%. Going across to operating profits, which was up 4.2% from ZAR 508 million to ZAR 513 million. Net margin percentage was down by 12.4% from 7.3% down to 6.4% as a result of the escalation in raw material prices, the result of increasing feed prices.
Expenses were well controlled and rand per ton margin increased, further supporting that increase in operating profits. As mentioned in the previous slide regarding maize and soy, the SAFEX yellow maize price increased the year under review on average by approximately ZAR 600 a ton, and the soy meal price increased by approximately ZAR 1,600 a ton. Internal sales volumes increased by 6% due to increase in broiler stock numbers and higher broiler feed conversion, as Chris has mentioned, and Gary will expand further in his presentation on the agriculture division. External feed sales volumes decreased by 3.6% on the back of higher feed prices, with volumes being 8.9% down in the first half, but in the second half, 2.2% higher.
Expenses were well controlled, 4% up in ZAR terms and 2% in ZAR per ton terms, and the average net margin increased by ZAR 9 a ton or by 2.2%. Regarding the sales mix, as mentioned before, volumes were up by 2%, and this is a result of increased sales volumes due to the poultry integration. As a result of the proportion of volumes sold internally increased from 58% to 60%. Regarding the external market, poultry external volumes remained flat at 5%. Dairy was marginally down from 23% to 22%. The other section, 14% down to 13% as a result of reduced feedstuff sales.
Thank you, Michael. Over to Frans van Heerden, the MD of the poultry commercial division, to reflect on that division's performance for the year.
Thank you, Chris. Good morning, everybody. Revenue for the poultry division increased by 15.3% to ZAR 13.1 billion on the back of a 6.4% volume increase and a sales price recovery of 8.1%. Breeder revenue increased by 10.3% and is attributable to higher broiler parent stock sales through our Ross operation, which Gary will elaborate a bit more on a bit later.
Operating profit decreased by 50.3% to ZAR 147 million, which is a 1.1% margin. Profitability was negatively impacted by a 15.8% increase in breeder feed prices and abnormal operating costs, which should not be recovered through sale prices this period. Broiler sales volumes increased by 6.4%. Of that, 4.8% is attributable to our expanded capacity in Olifantsfontein. Broiler sales prices recovered for the period under review. However, this was not enough to recover the higher cost base for the entire period. Fresh sales volumes have recovered to 95% of pre-COVID, and Astral has increased our margin and our market share in those categories. Overhead expenses wasn't well managed. However, higher COVID costs, looting costs, load shedding costs, and the ongoing challenges in Standerton were negatively impacted.
Our sales mix slide. As previously stated, Astral endeavored to increase its participation in non IQF mixed portion categories through expansion. This is evident in the slide where our fresh category, our [inaudible] category, and our IQF single category increased on the back of higher volumes processed. This graph depicts an index for the increase in Astral sales prices for the period under review, and it is evident that we could not recover the increase in cost price for the entire period, but only started to recover it in totality towards the fourth quarter. Thank you very much.
Thank you, Frans, for that. Back to Gary for an overview on the poultry division's agricultural division. Gary, thank you.
Thank you, Chris. Again, Ross Poultry Breeders increased its revenue for the year with higher parent stock sales volumes. Volumes in that operation increased by 8.4% year-on-year, and that was all into the external market. This has again driven increased market share for the breed in South Africa. Now, feed input costs increased by just under 16%, driven by higher raw material costs. This did have an adverse effect on the live bird production costs, with feed making up 68% of the live bird costs. Broiler production efficiencies did reduce marginally. Chris has mentioned earlier on, management took a decision to change the feeding program to feed a lower nutrient density diet, a diet with lower density in nutrients.
This requires the birds to eat slightly more feed for the same body weight gain or protein deposition rates. This feeding program that we implemented reduced or increased the requirement for feed by 17 grams for every kilo of live weight gain. However, the lower cost of that feeding program offset the lost feed conversion efficiency. Non-feed costs in this division increased marginally, benefited by higher broiler volumes going into the expanded processing capacity at Olifantsfontein, diluting fixed overheads, particularly in our hatcheries. Bird flu with us again in 2021, unfortunately. South Africa last experienced highly pathogenic AI in 2017. A different strain then, H5N8, with South Africa experiencing H5N1 this year.
Astral lost just under 6% of its parent stock or broiler breeder population, compared to 18% in 2017. The impact on our operations far less, but still came at a considerable cost of ZAR 49 million. On the broiler production performance KPIs, average daily gain unchanged year on year at just under 56 grams per bird per day. The genetics still performing very well in terms of its average daily growth rates. The age came off slightly as a result of our slaughter program. That equals about a 2.5-hour drop in the age, and the weight fairly similar to last year, although slightly lower on that lower age. Onto slide 26. You can see that the mortality still high, up 0.5% on average over the prior year.
This is still driven by broiler sites at altitude where we've experienced challenges in maintaining a balance between heating this bird through a cold winter and the required ventilation rates. Any oxygen demand issues or any issues in the supply of oxygen rather does put some strain on the bird and the development of particularly the heart. One does see progressive heart failure, which manifests in broiler sites and this particularly at high altitude. At sea level the bird is performing very well in this attribute. Feed consumption, again, slightly up, but we've spoken of this, and PEF slightly down as a result of the mortality and feed conversion rate increase. Moving on to other Africa. Daan Ferreira will speak in more detail on the discontinued operations.
In short, we have sold our interest in National Chicks Swaziland to our joint venture partner in that country. In Mozambique, we've sold the Mozambican assets. In both cases, we were approached by the buyers and we received firm offers on both in both Swaziland and Mozambique. The Zambian performance good. As you can see, the ZAR 35 million reflected in 2021's PBIT, mostly all in Zambia and the poultry performance there or the performance from Tiger Animal Feeds this year, very good, with a small exchange rate loss of just over ZAR 1 million out of that country. Industry matters.
Chris spoke earlier on about the import levels, so averaging 37,600 tons per month for the year, which equates to about 6.7 million birds per week in whole bird equivalents. We're aware of the tariff increase in March last year. We are of the opinion, though, that the 8% drop in the average monthly broiler imports has a lot to do with some other factors. During this time, we saw the COVID-19 lockdowns and its impact on the QSR sector and restaurant trade. We've seen or experienced currency weakness again during this time. Increased freight costs on the back of Brent and the availability of freight globally. Port shutdowns that transpired through the violence and looting and again, the Transnet issues.
Quite a number of factors that could come into play impacting total poultry imports. Based on industry statistics, to the end of July, the industry is slaughtering approximately 20.6 million birds a week. This is off a high in the past three years of around 21.5 million birds a week. Broiler slaughter numbers down. Imports for the period we've spoken of, although those equaled about 25% of total consumption. At the implementation of the higher MFN tariffs on frozen bone and portions and boneless cuts in March last year, that imports equaled about 30% of total consumption. AI will continue to pose a threat. The news out of Europe is not good, that the number of cases or outbreaks in Europe is picking up.
I received a comment from the U.K. on the weekend that this is probably the worst is yet to come, and Europe could see one of the worst years on record in terms of highly pathogenic avian influenza. Our anti-dumping application, the industry's anti-dumping application against Brazil and 4 EU countries, we should hear a decision on that by the end of June 2022. ITAC have completed their external engagements in that regard. In May, we reported a Western Cape-based poultry processor went into business rescue. They have subsequently closed their doors and exited the industry during the period or the latter half of our financial year. Thank you, Chris.
Thank you, Gary. The financial overview by Daan. Just before you start, most probably some of you would have seen a SENS release earlier this morning of Daan's departure at retirement at the AGM of FY 2023 in 2023. It will be the results of FY 2022. At this point, I wanna thank Daan for his contribution, massive contribution to this group. We will do so again at the AGM in 2023. Daan will retire and go and live somewhere down in the Cape between a farm and a coastal town. He retires at the young age of approximately 67 years, giving his whole last 22 years to Astral Foods.
Of course, you all know that Astral is regarded as a low-cost company or the best cost company, and it took us two years to look for a successor. What do you call it, Daan? Successor. A successor with the same initials so that we can save on administration costs, especially on business cards and on our letterheads. We have appointed another Mr. Daan Ferreira, who will start on the tenth of January, work with Daan for a full year before Daan retires. He will act as the group financial manager and CFO designate from January 2023. Over to Daan then.
Not really.
Thank you, Chris, and morning to all. I think no one likes it a lot, Father Time's catching up with all of us. It was something that I always thought was far in the future, and it's now almost upon us. On Chris, there's no family or other relationships between us, but with the same surname, I don't think there will be any problems in terms of quality that Chris will bring to the group. On the income statement, just first a quick explanation of the impact on the numbers of the discontinued operations. Astral was approached by two different buyers for the businesses in Swaziland and Mozambique with firm offers, and we considered that favorably.
As a result of that, we have to disclose those operations as discontinued operations. For that reason, the comparative income statement numbers are restated. The impact on the income statement is on a line-by-line basis. The discontinued operations information is excluded, for example, on the revenue and operating profit, but it is included right after the profit after tax as one line item. The two income statements are now on a like-for-like basis, as if the discontinued operations is now excluded. That, that's almost the base for going forward. On the revenue, the revenue increased. Again, it's as in the past, it's mostly driven by the poultry generated revenue, which contributes 81% to the external revenue of the group.
Any movements or changes in the total revenue impacts the group's external revenue. The operating profit, the 711 now that's for the continuing operations. That's down from the prior year's restated ZAR 813 million. But if one for comparative purposes had to include the discontinued operations, the operating profit would have been for the group 731 million versus the 838 million as reported last year. Operating profit margin, 4.5%. That's on the low side because of market conditions. For the rest of the income statement, there's nothing abnormal except for the, as I've tried to explain, the inclusion of the discontinued operations towards the end of 2014 and 2018 or 2019, as one line items.
On the next slide is an overview of the annual revenue of the group since the inception of Astral in 2001. The blue bars is the revenue generated by the poultry division and the yellow bars by the feed division. Because of roughly 60% of the feed division's revenue is in the group. The external revenue for the group, which is represented by the red line graph, is somewhat lower than the sum total of the individual contributions from the divisions. I think what is noticeable is the increase in the revenue right at the end, which is mostly driven by the increase in the poultry revenue as a result of the higher volumes, and that also increase or recovery in the selling prices of the poultry products.
The next slide is a similar slide, but just for the operating profit. Again, the blue bars represent the poultry's operating profit and the yellow bars the feed with the line graph, the margins. The feed division's profits are fairly or relatively consistent year-on-year with a lot of volatility in the poultry's contribution to the group's profit. The next slide is the same as this one, except that it's broken down into the two halves of each year. If one look at the last three graphs, one will see the poultry profitability is very low. Starting with the third last graph, which is the half of last year. That reflects the impact of COVID-19 or the lockdown as a result of COVID-19 on the selling prices.
One can also see that in the green line graph, which is an index line of the changes in the selling prices. One can see there's a change in the selling prices. While the red line graph represent the feed cost. There was an increase which directly impact the profits of the poultry last year in the second half. The profits of the poultry improved since then and mainly as a result of the selling prices started to catching up with the increased feed cost. Initially, there was still lag, but right at the end one can see clearly the green line is now above the red line, and so the margins are opening up.
On that basis will result in improved profits if that situation will be maintained going forward. On the balance sheet, the biggest change in the net assets of ZAR 3.8 billion versus the ZAR 3.5 billion is in the net working capital, and that will be discovered in one of the following slides. The rest on the balance sheet is no material changes, so I'm not gonna spend time on that. On the next slide is the capital expenditure, just to split it out between the owned assets and the right of use assets or leased assets. The depreciation and amortization on owned assets at ZAR 217 million compare to the capital expenditure for the past year of ZAR 260 million.
Not much movement on the net carrying value of the owned assets. The 260 million also represent more normalized capital expenditure, not having the expansion costs of 270 that we had in the prior year. On the working capital, the big changes are firstly in the biological assets. That's the live birds. Higher volumes because of the higher slaughtering, as well as increase in cost driven by the higher feed costs. Trade receivables are up to ZAR 12 million. That reflects the revenue of September month, which obviously is a good thing to have that. I can also confirm that all those trade receivables have settled their debt at the end of October, so the money with respect to that is largely in the bank.
Trade payables also higher because of the higher feed cost. On the statement of cash flows, just wanna point out one number, and that is the dividends paid of ZAR 418 million versus the prior year's ZAR 166 million. That ZAR 418 million must be seen in the context of not having declared an interim dividend last year. While the dividend for the full year of last year was the normalized dividend based on a 1.9 cover. The final dividend, the cash outflow only happens in this year. The ZAR 418 million is an inflated number. One can safely say that a ZAR 150 million should have been in the prior year had we declared the interim dividend.
That put the cash outflow of ZAR 265 million in context. Although the cash flow was negative, we still ended up with a positive net cash in the bank at the end of the year. This is just a historical overview of the headline earnings per share and the dividends per share. For the last couple of years, it's roughly two times covered. Okay. In summary, revenue is up. The profits are down. Capital expenditure to ZAR 16 billion is normalized. Cash flow for the year was negative ZAR 265 million, but we remained in surplus cash, and we believe that will, going forward, still be the situation. We managed the balance sheet to have surplus cash.
The total dividend for the year is ZAR 7.00 per share, which equates to a 1.8 times cover. The final dividend, as you probably are all aware, is ZAR 4.00 per share. With that, I'm handing back to Chris.
Thank you, Daan, for that. On our prospects or outlook. Again, I think it's well known the record high unemployment levels. We talk about figures above 40%. Poultry being a commodity obviously impacted by the unemployment levels and the pressure on consumer spending that could have been spent on poultry if there were jobs created. That will stay with us for quite a while. It is a concern, and we trust that we can create new jobs in the new year in South Africa. The raw material outlook's still volatile. Gary gave some reflection on that. That could have either a positive or a negative impact on us going into FY 2022. We'll report on that as we go along. Of course, the municipal service delivery interruptions and the national load shedding will keep on costing us money.
We've got some plans in place, especially at Standerton. We will have to review our plans as we go along to maybe become independent of that council and of Eskom in the near future, but of course, at a huge price tag. The bird flu will remain a concern to us. Europe is currently experiencing record levels of the outbreak, and that could impact us in the new year. From a positive point, we've created a capacity in Olifantsfontein or Free State, at about ZAR 800 million. That capacity is now playing in our favor, and we can utilize that for product category opportunities away from IQF, more into the value-added and service, quick service restaurant and in the fresh categories that will benefit our margins. We have continued gains from the Ross broiler breed.
Again, our market share increased there, and the bird is performing well. We've learned how to farm with it, and from time to time we just have to pull back a bit on it. Also, from the Aviagen stable, they predict a continuous further improvement of the genetic potential of the Ross 308 breeder over the next 10-20 years. Poultry supply and demand currently well-balanced. You see the country is producing about 1 million birds a week less year-on-year. We don't know how that will change, but bird flu has impacted that, especially the negative impact on the breeder population in South Africa. Supply and demand well in place, which assisted us somewhat in being slightly more aggressive on pricing.
I think it's only fair to say that we will continue to maintain a strong and resilient balance sheet. Neither Daan or myself or my board like debt, and we will ensure that our cash position remains in the green or black territory in the near future. With that, I want to thank everybody for taking interest in Astral, and I also wanna thank the Astral team, not just the people around the table here today, but everybody out there who's worked very hard during the lockdown difficult circumstances, and also the people in KZN that worked under the extreme pressures of the looting and the violent situation. Some of our farms were burned down, and the managers were physically attacked, their houses and their homes. They were displaced with their families.
We want to really take this opportunity to thank Astral's management team and everybody that supported us in the value chain. Thank you for that, end this presentation.
Thank you very much, sir. Ladies and gentlemen, that concludes today's event. Thank you for joining us. You may now disconnect your lines.