Welcome to everybody. Thanks for your time, and thank you for taking interest in Astral. As Marlise said, a big swing from year to year, and I think there's going to be a lot of focus and questions with regard to that, but you have to see it in context. We will try and explain this as well as we can, and if not, during the Q&A, we will try and address your questions as best as we can. Just a quick agenda: I'll do the business overview, Gary operational, industry matters. Dries will try to do the financial overview. I'll do a quick view on the outlook, and then it's time for Q&A as Marlise explained to you.
Then closing words from our chairman, and then, as you know, there's a lot of additional information in the back of your presentations that's been put on our website, information we used over a number of years to better explain how to look at our business. The key financial indicators, fortunately for me, all green. The arrows are all green. From a revenue perspective, always important for me, if you look at the revenue history, you have to create an increase in revenue or turnover. And again, this is testimony over many, many years that we have been in a position to continuously grow top line. That, of course, if you go into the detail of the presentation later, is based a lot on both volume sold and price, so it's a combination of the two. The profit before interest and tax at ZAR 1.1 billion.
Last year, a loss of ZAR 620 million. So a swing, and if you count back one or two funnies, a swing of close on ZAR 2 billion year on year, and I think that's the achievement and what can be done in any organization. The profit for the period up 247%, headline earnings up 245%, and Dries will delve into the detail of that. Then I think the most important factor for us, the focus point during the past year, was to look at the debt levels and the overdraft, something we're not used to and something we do not like as a highly volatile, high-risk industry, no debt. So during the past year of FY23, we burned ZAR 700 million of cash and additional ZAR 1.1 billion in overdraft.
That has all been pulled back, and as we stand here at this very moment today, we have no debt on our balance sheet, so zero debt, and that's been a major achievement, and it was also the focus over the past year. And then, of course, for those of you that always ask about the dividend, it was well debated at board level, and we looked at the affordability, and at the end of the day, for our loyal shareholders, we decided that we can afford to pay a dividend without going into the red again in the near future. That dividend will only flow at the end of January. That's the key indicators.
The salient points that drove or was behind the key indicators is first of all, and this is in a specific order, the broiler day-old chick cost increased year on year following the contingency measures to mitigate the impact of bird flu. So two things happened. There was a number of actions. One of the key ones, we had to keep our breeding stock that was still healthy and alive longer to get fertile eggs, and of course, the older the chickens are or the breeding stock are, the worse the hatchability, so that's an additional cost [audio distortion].
Money from South America at an additional cost, almost double the cost than what we produce a year, and that is why it's a bit of a hangover into this year, the day-old chick cost increase. Poultry feeding cost decreased, and it reduced levels of feed. Remember in the big bird era, we had the birds from time to time up to 50 days old, where we normally slaughtered at approximately 33 days, so you had to feed those birds. And in mid-June last year, we rectified that situation, part of our turnaround plan, and we had to, we were now in a position to use less feed because the birds are at the right weight at the right age. Therefore, the broiler life cost decreased, that is now approximately, Anthony, 65% of total cost.
It was as high as 70% at one point in time of your total cost, and a lot of focus on this, and Gary will quickly speak to you about the raw material situation and the soft commodities.
I think one of the positive things that came out of the turnaround plan is we tried to turn everything upside down in the company and relook at it and see where we can improve. And if you don't farm right, you can't be in this business. So if you look at the key statistics on our farming performance a bit later on, you will see that after that program and after the bad year, our current year's results is [audio distortion] And then, of course.
Benefit to us and to the industry, no reported incidents of bird flu during our past reporting period.
We had to cut back on our broiler placements. You all know the consumer is under stress, not in a good situation, unemployment, discretionary disposable income under pressure, and we just adapted our production according to how we read the market. And the positive thing about that is now we have spare capacity, so any uptick in the market from the consumption point of view, particularly the risk of bird flu, is now an asset that we're going to afford.
Yeah.
What was the quote yesterday from one of the reporters? "Money for nothing and chicks for free." So that's actually what it means is it's been paid for spare capacity. You don't have to expand or spend any CapEx, so that's a positive for us. Our poultry sales volumes increased. Now, it looks a bit funny because we cut back, but your sales increased. At the end of last year, we ended with quite high closing stock levels, finished goods. 60% of the reduction of the stock was due to selling out of stock. So our stock level is currently in good shape. The poultry selling prices improved year on year. The average for F24 versus F23 has increased by approximately 5%, but towards the end of the current year, prices started to drop off due to a number of factors. Broiler margins positive.
Last year, it was a negative of close on 10% negative margins on the broilers, and that had to do with a big bird area where we had to put all birds in five-kilo bags and sell it and discount it. So negative margin last year, this year, net margin of 1.3% on broilers, so it's paper thin. Net levels cleared. Again, I spoke about that very positive. At the end of last year, our debt was at ZAR 1.03 billion, more or less. It's all been cleared. It's gone, and we're going to pay a dividend. This slide was developed in the height of load shedding to indicate the additional costs the company had to bear. If you can remember, at the time, the yellow indicates additional feed that had to be fed to these big birds.
That is gone now, and we also at the time said that all that will remain is the red bars, which is additional diesel to run the operations. Last year, the cost of this was close on ZAR 1.7 billion in total. If you look at that [audio distortion] . So that is the.
Focus program.
We've cleared that. We're back to where we should be. Now, you might ask, why do we still have additional diesel here or cost there? And remember, where we operate, it's not just about load shedding. It's also about the infrastructure in towns. So for instance, in Standerton, there's limited electricity from Eskom to the town. If we keep our factories going all day, the town will trip. So in peak consumption period of electricity, we have to run the generators, and that's approximately over the past six months, about ZAR 10 million a month. So over the year, ZAR 120 million almost there on additional diesel, which is not supposed to be there. The next slide explains the movement year on year, and I'm sure there's going to be a number of questions on this, which Dries can address, especially from the cash perspective.
[audio distortion] This is the difference. This year.
Operating profit of ZAR 1.125 billion, a change of ZAR 1.75 billion swing from year to year. I think that's more the storyline. It's not just the profit or the loss, it's the swing. ZAR 380 million from broiler selling increase on broiler selling price. I spoke about the 5%. Broiler sales volumes up. However, there's a cutback. Out of stock, finished goods stocks contributed ZAR 100 million, and then broiler raw material costs coming off the average for the year versus the prior year's contribution positive of ZAR 88 million. Then the reduced feed consumed. Remember the previous slide, the yellow bars? This is the benefit, close on ZAR 1 billion. Less feed required to feed the big birds. And then the other load shedding cost, the swing between the two years, ZAR 250 million, a quarter of a billion rand. And then there's a bird flu benefit.
Again, the swing, the cost of this year versus last year, ZAR 81 million. Then there's some insurance recovery of close on ZAR 200 million. That was insurance against bird flu, which is now no longer on the cards. There's no bird flu insurance across the globe. We were one of the last ones. We were audited by external international specialists, and we were almost, I think, the only one on the continent that were deemed with the correct biosecurity measures to subscribe to insurance. Of course, the two red bars pulling the profitability down a bit. There's some personnel incentives there, and my golden handshake is most about 50% of that. All the others combined. In that, it's the net, that last block of ZAR 144 million, it's the net of your inflationary cost, the profitability from Ross and [audio distortion] , and a lot of other things.
That's the net of that. [audio distortion]
What is possible? That was a 14% net margin on broilers, and there's some good ones there. If with today's volumes, just imagine today's volumes and the efficiencies of the bird. If you get a 5% margin, 5%-7% margins on broilers, which I believe is necessary to have a sustainable poultry industry, not just Astral. You can't reinvest with these margins. It's too thin. So just imagine what the profitability of this company will look like if we get close to that kind of margins. 1.3 margin for the half, you make ZAR 1.1 billion profit. So that's a positive view. From here, you can only move north, and I can say that today. In the next year, it should improve. A lot has been said in the media and by the politicians and the Competition Commission. If you're out there, look very closely to this.
Just two weeks ago, we read in the media about soaring chicken prices. I don't know where they get their stats from or how they measure it. This is fact, audited fact. This is the red line: broiler selling prices over the past, what's it, six years, seven years, and that is the CPI Food Price Index. Now, remember, chicken is in that index. Look over the past year of how prices have come off, deflationary chicken prices. So people walk into a store, look at a pack and say, "Oh, it's expensive." Then they write a whole article about the soaring price of chicken. It is simply not true. This is fact. So there's no profiteering. And for anybody out there that always want to talk about the chicken price, rather go and look at the margin that we achieve.
And we don't achieve a thin margin because of inefficiencies. We are still rated as one of the top 10 most efficient poultry companies in the world. So the margin is thin because of other factors. With that, we get to the slide that a lot of you use these days. This is movement from a specific point in time. The yellow is broiler feed price. So it's a movement month on month or year on year. So here you can see how feed prices ticked up and the movement, slightly less upward movement. As we said, feed costs came down, and that is the change in the broiler selling price for a month versus the same month in the prior year. A very positive period there. But look what has happened here. So the inflation has come off to a deflationary point of view.
And if we could add October and November, you would see even a further downward trend on the movement of the price. Not the price, the movement versus the prior month in the prior year. And the same raw material cost, Anthony, it slowly started to move on the back of a smaller old crop, and there's not enough movement to talk about the new crop. That will only come into play at a later stage. However, this looks negative. I think if you speak to Frans, from as late as last week, two weeks, we've seen quite a positive pull on chicken in the market, and things just look slightly better. And somewhere, this industry requires a price increase to get out of the red into the black, just to be sustainable, to be there another year or two.
So we will put all efforts into try and recover our input cost in the market. [audio distortion] .
Thanks, Chris. Can you hear me okay? Good. Got you. We'll quickly cover this. Chris has already alluded to some of the points over the past year. I think the important thing on this slide, and if we look at the balance sheet for maize, reflecting very quickly on the old crop, as we look at the graph, the South African crop suffered about 3 billion in early 2024. Significant impact on the type of maize crop in the country. So we're now trading at the moment a very tight old season crop. Carryout levels, 5.4%, possibly the lowest level since.
They started keeping data from 1998. So a lot of exports going into the region with crop failure that was experienced both in Zambia and Zimbabwe and other countries. So very tight old crop with pricing at the moment. You'll see on the next slide, trading about 1,000 tons per region per year to the new crop. Next year's maize crop. So looking at that very quickly, we have promising weather conditions, although the rain a little bit late. We have had good coverage across the west and the east over the past three, four weeks. So planting progress has picked up significantly. Yesterday, the planting progress was at 31% against a five-year average of 36%, and last year, 36%. So definitely some progress there in planting. And the yields are expected to improve from last year to about 6.1 tons per hectare in the new year.
That will benefit the crop, obviously, and should lead to a good carryout for the next season, and you can see that pricing in July contracts next year already. This is just the graph where we reflect on the yield. This was the impact of the El Niño in this past summer season and benefiting in the upcoming growing season from La Niña and the better rainfall conditions, reducing a 16 million ton crop. This is what's happened on Safex. There's actually something more tricky. I mean, maize trading at ZAR 4,900 a ton yesterday on December contracts. So definitely trading a massive premium on the old season crop. Yellow maize trading about a ZAR 2,000 a ton premium on the new season crop.
So maize at the moment on old season expensive, and we're obviously looking forward to a better crop next year that can relieve some pressure on the South African balance sheet here. Soy meal prices, well, this is a good picture. Internationally, soy meal prices have come off significantly, and we have had some assistance through the year with a stronger currency. So if you look at this together with the increasing trend in maize prices, there is still a small advantage to feed price with feed prices coming off based on the combination of the inclusion of maize and soy meal in the broiler feeds. But a good downward trend in soy meal prices. You can flat price soy meal now around ZAR 7,500 a ton, and it wasn't too long ago that you were flat pricing soy at ZAR 13,500 a ton.
This is certainly a benefit to farming poultry. An overview of the feed division for the year. This division reflecting revenue reducing by 15.2% and the profits reducing by 28.3%. Now, this is largely an effect, mostly an effect of the lower internal volumes that Meadow supplied into our poultry division this year. Last year, the big bird era, we've spoken a lot about that. The birds consumed significant amounts of feed. That feed was all supplied internally. That benefited Meadow's results last year, as you can see here, but it was a massive negative to the group. This year, a more normalized earnings level for Meadow feeds if you look through the years, look through the cycle. And certainly, the volume effect affecting this year's numbers might be to the net margins decreased this year, and that's purely affected by last year.
The volumes that did increase had the benefit of driving to the fixed cost further, which improved the net margin. This year, those volumes aren't there. Still carrying the same fixed costs in the income statement, and you'll see the margin rand per ton margins have decreased slightly. We've spoken about the Safex prices for yellow maize and soy meal. This is the big number, 19.5% reduction in internal feed sales, and that is just the swing from not feeding the big birds through last year following load shedding to a normalized broiler production performance this year, and so related to the record results and ensure there's no cut-off. Instead of feed volumes decreased earlier, we've had some higher sales into the beef and into the production sectors started dipping some of those sales back into the commercial layer of plant breeding as well.
As biosecurity has returned to those farms and quarantines have been lifted and the risk of bird flu has dissipated, we have slowly gone back to that market. We've had to carefully consider credit risk in that area, but also biosecurity is a major consideration in supplying those independent commercial farms. Expenses have been well controlled across this division. Expense increases with inflation of 73% for the year in Meadow. So as you can see, the swing from that swing to a more normalized sales mix goes from 60% of the feed sales out [audio distortion].
Which is, whereas last year made up 66% of the sales mix.
Poultry division, commercial, consolidated view of the poultry division, revenue up that was supported by higher sales realizations, which Chris has spoken of already, but also higher sales volumes. Now, although we cut back in the year, you did see that we have, or we can see that we have sold more chicken, largely out of stock, and then the product mix returning to normal. So as we exited that big bird area, era, sorry, where everything was going into five kilo IQF format, and we were short supplying the QSR sectors and the fresh sectors, those volumes have returned into that product mix, which has benefited sales and the sales realization. Margins for the total division, 3.4%. Chris spoke of a broiler net margin earlier on of 1.3%. This is a total margin including the breeder income in this division out of Ross Poultry Breeders and National Chicks.
The feed price down by 2.1%. Now, if you look at the moves on Safex in the year where we had record high feed prices last year, you might expect that percentage to be a bigger number. It's skewed by the feeding program. Last year, we fed a feeding program which included very low-cost rations. We call them maintenance diets. That was just to keep the birds alive on farm with these big birds that we had after load shedding. So the year-on-year comparison is likely skewed by that, but feed prices nonetheless coming down, and Chris has already spoken of the higher day-old chick cost in 2023, which has come about as a consequence of bird flu in 2023, so 2024 impacted by that still. We imported close on 35 million broiler hatching eggs from Brazil through the year, and they came in at a significant cost.
We have spoken about the sales volumes increasing. This was supported by a better product mix, but then we also closed the year last year with higher stock levels, so we've reduced our stock levels by approximately 25% with comparative closing periods, and so sales supported by sales out of stock, which was necessary, and the cutbacks that we implemented obviously supporting that, and that was an effort to better balance our supply with demand in a depressed consumer environment, so you can see through the year, we slaughtered 5.4 million birds a week in F22, which was a more normalized year. No impacts, external macroeconomic impacts. We slaughtered just over 5.8 million birds a week, so plenty spare capacity, and in this lies a good revenue growth opportunity that can be exploited going forward, so well positioned for any turnaround in the consumer environment.
We've spoken about the broiler margins. Operating expenses were lower. Last year, we carried significant costs in diesel and generator costs. Obviously, this year, still costs in the mix. You've seen that earlier on, about ZAR 10 million a month now. And that's just to keep our operations running in a municipal environment. We did have water interruptions again through the year, but about ZAR 14 million lower than the prior year, the costs. But still a significant cost in there at about ZAR 17 million. This is a sales mix. So although we have returned to the fresh value added in QSR categories this year, you can see those percentages are now off a higher volume base. So about 8,000 tons improvement in the sales of product into the QSR sector.
That's where we will benefit there from better or better margin potential in the value added QSR sector and again returning with volumes into the fresh sector. So the product mix back to a more normalized base after the impact of bird flu and the big birds last year. On the bird performances, parent stock sales in Ross, that's Ross Poultry Breeders. We sold parent stock out of Ross. That was disrupted somewhat during the year on the back of bird flu in 2023. A number of broiler breeder farms or customers of ours that were impacted by bird flu either canceled their placements or they moved their placements out. And we had to fall in line with the subsequent quarantine restrictions around their farms. So what this did result in in the year is a slight reduction in volumes.
Breeder revenue, we had that on an earlier slide that increased. This is primarily on the back of the higher day-old chick selling prices driven by the higher hatching egg cost. Importing eggs from Brazil with some of the actions that were taken to produce or get more eggs out of the flocks that remained after bird flu. We extended the age of those flocks. You get the eggs, but you don't necessarily get an egg that is of good quality or fertility, and hatchability was impacted as well. So that all comes at a cost and filters into the day-old chick price. Hence, breeder revenue in the internal and external sales increased. We've already spoken about feed input cost decreasing. This was the big one. So about ZAR 1 billion swing in the feed bill year on year.
You can see that on the next slide with improved feed conversion efficiencies. Our restocking program, we lost in Gauteng and Mpumalanga approximately 80% of our broiler breeders during the bird flu pandemic of 2023. Nationally, 40%. We've restocked everything, so that was completed in a year. And fortunately, as Chris said, no incidents of bird flu in the industry this year. So this is the key one. You can see the broiler performance metrics here. We've said that, or we've spoken a lot about the impact of load shedding in the prior year. You can see the significant improvement in weight or slaughter age. So I know this is indexed from 2014, but if you look at the history going back, the lowest age that we've slaughtered a broiler at and achieved a live weight of approximately 1.85 kilos. So good performance here from our farming division.
Record high PEF for the group. This is over approximately 280 million broilers that have been slaughtered for the year. The impact of load shedding last year on the feed conversion ratio was significant, so in that period, we fed at least 250 grams of feed more for every kilo of live weight gain, and that is a lot of money at the feed prices that we experienced today, so certainly without this and reaching a record low feed conversion or the best feed consumption, the kilo live weight gain that we've seen, certainly assisting the live cost of a broiler going into our processing plants, and this is the part Chris mentioned early on. You have to get that right to get your cost base right and feed making up 65% of the live cost of a broiler, so good results from our farming division here.
And this was where the focus went straight back to in mid-June last year when we cleared or slaughtered the last big bird. Just very briefly on industry matters, nothing much to say here. You can see that total poultry imports more or less flat on average for our financial year, increasing to 34,232 tons. So we look at this as a more or less normalized level. You'll see, you remember in the previous slide, we have in the past seen imports reaching highs of 50,000-60,000 tons a month. We have a tariff regime in place, anti-dumping duty against Brazil, a general rate of duty on frozen chicken imports. So the environment or the playing fields have been well leveled where we're not competing with dumped product. And our quarrel has never been with imported chicken, but has always been with dumping that took place in the country.
Imports still accounting for about 22% of our footprints, and for those of you that are new to the industry, when we signed the Poultry Sector Master Plan, this was about 30%. There has been some improvement in this space. The import tariff rebate that was spoken a lot about earlier in the year, that was introduced on the back of anticipated shortages in the broiler sector on the broilers or the breeders that were lost last year. That never materialized. I mean, we demonstrated and presented enough data to the DTIC and ITAC that there wouldn't be a shortage of broiler meat. The industry imported broiler hatching eggs. There was one quarter where they issued permits for a rebate on those import tariffs, and following further representation, we met with the minister at the time. There were no further import tariff permits issued.
This has been in place quite a bit lately. So we are in the process of waiting on a submission to Treasury that was sent approximately the past week. And we will be making the submission within the next week. [audio distortion]. On our dynamic debate on the financial area, thank you very much.
Morning, everybody. Thanks, Gary. Gary and Chris created a good understanding and backdrop to the group's results. I'll bring it all together with a couple of slides. Firstly, the income statement or the statement of profit and loss.
The big driver of the recovery was the fact that we had our revenue increase by 6.4% while maintaining the cost base back to the efficient farming environment, which was discussed earlier on. So the big swing in the profitability then comes from the above factors. And we had almost ZAR 2 billion swing, as Chris mentioned, barring a couple of provisions. That impacted on the number, but a 281% improvement or a ZAR 1.746 billion improvement from last year's loss to this year's profit. That's a recovery of 1.525% over the last year, which over the long term has been a big advantage. But this was an impact in our expense wise. As I was mentioning earlier, we added to our team some ongoing costs on the field. The feed shortage peaked at cost of ZAR 1.5 billion, [audio distortion] . So there's been an increase over the year.
But that's because of the fact that we had the large portion of the overdraft that we're carrying into this year that was under our full level through the year. We basically said that we need about ZAR 300 million to get to the 12-month cycle. So where we are today is, as Chris mentioned, we have been able to see that we are not at the draft year-end yet, which means there's either ZAR 35 million or about ZAR 70 million of finance costs, which finds way out of the picture that we need to do the financial work. Indeed, the earnings of this year are around a few thousands of rand, which is the basis that we would be able to make just under ZAR 20 million of the finance cost, which will remain about 50%. And we will, unfortunately, be fighting with that on the next one.
[audio distortion] , so there's no surprises on that one. Obviously, we still carry an assessed loss due to the new financial year for the prior year, which will be a bit different than actual. We'll see that from the balance sheet. As well, there's a big pickup again on the deferred tax liabilities that has grown. Last year, we dropped the deferred tax liabilities to a lower level as we had the deferred tax asset. And as we unwind that asset, it creates a cash inflow as we pick up the tax cost and utilize the assessed loss, then on the EPS and HEPS, 247% and 245% up year on year. The HEPS at ZAR 19.20 earnings per share.
The main difference between the EPS and the HEPS is the insurance recovery on the hatchery fire that we had here in the Western Cape last year. Then, the long-term picture that we're showing you here, the full trend. The red line indicates the external revenue that the group generates. The yellow bars are the feed division revenue, and the blue bars are the poultry division revenue. As you can see in the group perspective, over the long-term level, it's that upward trend. We got that blip here and there. We had a small one there, but never going backwards, always just stabilizing before it grows. And I'll touch a little later on in the next slide that 5% feed cost, that comes at us and the cost of the department. And that's always at 5% of the results in the poultry division profitability levels.
But this feed division, as it was before the revenue because the internal sustainability of the poultry division has come down year on year, as I mentioned earlier. But obviously the mix of internal and external results.
To come back in the feed division.
And as well as the poultry division's growth in revenue, ultimately feeding into the group's revenue number growing of 6.4%. If you'll excuse the busy graph, we try to shorten it, but then it loses its impetus. This goes back to when Astral was listed. We show you by financial year. Again, the yellow bars are the profitability of the feed division, and the blue bars are the profitability and, in some cases, the lack of profitability of the poultry division, which really shows the sensitivity of the poultry division or the volatility, which I'll touch on in the next slide as well. But what's important, you look at the 5.5% net margin for the group. If you look back at the history, my comment earlier on, it is below the average of the long-term that there's a cost of that in there.
And obviously, there's a latent potential in the poultry division as we come back to the volumes. And.
On about 600,000 birds per week latent capacity, for which a major portion of the costs are still being incurred. You can't remove those costs. It's platey. It's under recovery, the way we refer to it. So as those birds, I think Chris mentioned a song by Dire Straits. That's kind of the space that we're talking where, as those birds come back into the picture, you'll get the revenue with minimal uplifting cost. The feed division, ZAR 545 million operating profit. If you look back at the history, it's again, there's solid performance. It's visible if you look at the past, how that constant performance by the feed division comes through year after year. The volatility around the poultry division, very visible. ZAR 580 million, still one of the better performances over the last 24 years, but still the volatility is very visible.
If I go to the next slide where we show it by half year, back to 2014, again, the yellow bars are the poultry division. Sorry, the yellow bars are the feed division, and the blue bars are the poultry division. You can see the profitability as it reacted to the red line is the change in broiler selling prices. As we recover costs from the market, the cost that we need to recover is depicted in the green line, which is the feed input cost, the major cost driver behind the production of poultry product. And where the green bar crosses the red bar, it typically depicts problems for the poultry division. You can see the way profitability diminishes as those bars get closer to each other and cross. It doesn't create a great outcome.
So obviously, this is the eternal fight for us is to recover costs from market as the cost of the feed pushes up from the bottom, and we need to recover that from the market. Again, you can see the consistency in the feed division and the volatility in the poultry division, but a nice stable profile for the last 12 months as we've settled into a healthy gap there. On the balance sheet, I'd like to just focus on this line that calls net assets, where we've managed to reduce our net assets or in the way I look at it, we say it's the invested capital in the group. This is the net value of the assets that we used to produce our profits. So we've managed to recover the almost ZAR 2 billion operating profit swing on less assets this year.
And this really shows that in the last 2023 year, we had to put a lot of action plans in place, which consumed a lot of assets, and we were able to unwind those positions by managing the balance sheet very tightly. So obviously, the recovery comes from the P&L. But if you don't hold the balance sheet tight, then you don't have the cash flow that comes out of it. And this is really the platform that was created. So 6% improvement in invested capital. It comes from a 4% reduction in our long-term assets. Obviously, there's a non-current, the right-of-use assets that runs with the leases. You can see the movement there roughly contrary to each other. We managed to keep working capital very tight, which I've got a slide on. And the cash is the answer that popped out of the picture.
So it's the profit plus the improvement in the invested capital in the group that resulted in us being able to repay all the debt in the group. We ended on a net cash position of ZAR 12.909 million for the year. Equity position, ZAR 4.752 billion, prior year after the loss that we incurred, just over ZAR 4 billion. Capital expenditure was part of keeping the balance sheet tight, if I can use that term. Depreciation, ZAR 310 million last year, ZAR 321 million, a slight uptick, mainly because of the prior year's large CapEx program that we had to incur. Or you can see on the second line here is the load shedding and water-related costs that came through. So we're sitting on the combination of those two.
You can see there's quite a heavy investment that has gone into our preventative or defensive position on water and load shedding-related costs.
CapEx back to ZAR 275 million this year, more normalized profile, slightly lower than what you can expect into the future. You can probably take a cue from the ZAR 321 million. But what we also did was we managed to clean up our capital commitments in this year. Last year, we stood here. We had almost ZAR 600 million commitment on capital expenditure that lay ahead of us. We didn't spend all that money. We placed a lot of projects, if you recall, last year on hold. We managed to reschedule those into later periods when it's more aligned with the reality of what the group's market conditions are. And then we've managed to unwind or cancel the Ross GGP farm project by negotiating with the supplier of the GGPs.
And then we've got the County Fair Logistics contract, which is a right of use asset that has gone live at the beginning of November, that has been marked as a ZAR 125 million asset that will come onto the balance sheet in the new financial year. Then on the working capital, just very briefly, the activities that happened in the year, we had the biological assets, which increased by ZAR 283 million. That is the repopulation program that Gary and Chris referred to earlier on, where the parent stock, the broiler breeders, had to be replenished after the bird flu impact. Then poultry inventory, good reduction in the poultry inventory, finished goods inventory, where we came down from ZAR 1.4 billion last year to just short of ZAR 1.1 billion this year, releasing cash back into the balance sheet. Feed division, keeping the silo stock well controlled.
And then the receivables, this is all cash in the bank. It reflects the higher sales volume, exceptionally good quality debtors' book. Almost no debt. If you unpack the age analysis, that is dragged. There's really a handful of debtors in the entire group. And I mean a handful, probably not more than five, that are dragging a little bit, and it's a small number. Then on the current liabilities, keeping that tight as well, ZAR 134 million expansion in the current liabilities, leaving us with a net working capital of ZAR 6 million, changed year on year. And included in this, obviously, is some provisions and accruals, as was pointed out on the waterfall graph for the profitability, which you will see on the cash flow graph. We moved that back into the profit side to show the real picture.
Here, we've got the cash profit that came into the year off the base of the overdraft of ZAR 1.031 billion in the prior year, generating profit ZAR 1.4 billion. We had the insurance payouts, which included the County Fair Chickens, the bird flu, and the pole flood losses. That's ZAR 250 million cash that came in during the year, ZAR 142 million from the sale of our almost 10% stake in County Fair Chickens. And then, obviously, we had to pay some debts. Again, we've got the working capital as a major portion of the utilization that we've been making here in the past. And we will see this [audio distortion] profits, ZAR 258 million.
And then the finance expenses, debt payments and other ZAR 235 million that's with ZAR 13 million of net cash positive.
We're paying ZAR 8.1 million in the provision that we had in prior. This is the most favorable figure on the cash flow statement for working capital correctly. [audio distortion] . We grew up 6.4%, ZAR 20.5 million. Operating profit recovery, almost ZAR 2 million, ZAR 1.125 million. Obviously, we did the profit ZAR 275 million, resulting in cash inflows net of ZAR 1.1 billion, ZAR 685 million net position of ZAR 5.1 billion position on the balance sheet, and that allowed us to reclaim ZAR 521 million. Thank you.
Thank you, Dries and Gary. That takes us to almost the close on the outlook.
The outlook is not something we just sit there and decide on a couple of issues. It's well discussed, and it's presented to the board for their guidance. The inputs, so this is a view of how we see the next year, and some are negative, some are positive. Always try to give a balanced view of how we see the market out there or the country out there, but it still remains a major risk. No retraction, no insurance, and no compensation, so I think it's still a risk that is quite significant.
Thank you, my honor, readers.
And Gary and the management at SAPA are fighting this with tooth and nail to get that done. But it's so onerous, the rules that were put to us by DAFF, that it's very, very difficult to sign that off. And it's a continuous argument. Water supply disruptions, maybe you don't know of that year down in the Cape, but up north, a major threat, the distribution of water. There's enough water, good rains, maybe not enough dams or new dams being built, but the infrastructure is the issue. And if it wasn't for the CapEx that we have spent to mitigate these, especially reservoirs at Olifantsfontein Plant that give us additional two days of water usage, we would have been down much more than what we've been in the past. It is a concern.
We had to buy land adjacent to our abattoir or processing facility, built reservoirs just as a backup stock. Now we're looking at further plans to have more longer-term water, buying water somewhere from a farm, build a pipeline, bring it there. The same and standard and the failing infrastructure most probably will bring about ZAR 100 million CapEx next year.
We've added it to our plant.
The constrained consumer spending remains an issue in South Africa. We know that we talk about 63 million-65 million people in this country now, with no new jobs being created. It should be a concern to all of us, not just to a chicken supplier. And if you don't have GDP growth, you're going to run into trouble with regard to job creation. You need about 6% GDP growth just to create jobs and keep everybody afloat. So this is a concern to all of us, and I don't think it's going to change quickly. We talk about the Two-pot system that will bring billions to the market. That hasn't happened yet. And maybe if it comes, part of it will flow into the eating habits of our people in the country.
And then, of course, the interest rates that are on a downward trend could contribute to better spending over the next year or two. I don't think it's going to happen too soon. And then the competitive retail landscape in South Africa, it's extremely competitive. There are excellent retailers and wholesalers out there. You know of all of them, and especially the one doing a separate listing or split listing now, it will bring about even more and fiercer battle for the customer. And chicken, of course, always the big trade quarter to a store on if you want to promote your eggs. They will pick up the paper, the newspaper, the magazine, the brochure, the prices in the window, and chicken will feature too. Features in front of it. So that's the big four quarters.
Sometimes we get the crossfire, but people like the chickens to go into a specific period. That's why they do not go to the chicken business because they always go to it and that is the spot of life we have to get there. I think the positive one is now the finished goods stock levels. If you don't get the birds the proper stock levels, it will be extremely difficult going forward, quite frankly. You've got to get the proper stock, get the outside cover stories and the official press, so I think we are right now.
Land, and so not the industry.
Where we are at a much more comfortable level with finished goods. And again, the contributing factors there was higher sales volumes together with the land cutbacks. I think the one thing that business people always talk about is uncertainty. And the political landscape over the past three, four, five years was extremely uncertain. We never knew where we were going. And then we had this election with a lot of surprises. And I think if you could sit down before the election and say, "What is your wish? What kind of permutation do you believe is the best for the business community and for the people of this country?" I think we got that. So that's a positive. How long it will be stable, we don't know, but at least there's certainty now. There is a government of national unity.
I can just understand it's not easy in those negotiating rooms and boardrooms, but most probably the best outcome we could have wished for, and then we talk about the interest rate cuts. I firmly believe we'll see at least one more cut, and it gave five points this year. Cost will be negative. We will not. [audio distortion] , we could get to a ZAR 60 million cut profit for most powerful companies, and then Dries quickly mentioned that the price cap will go down because of the price barrier.
I was sure all these investors about future capital, one of the key things behind this bill, and I'm told there will be a GGP facility that was part of a contractual obligation with Aviagen, which is about ZAR 370 million and 21 businesses in the area of Killarney. So we know that confirmation from the board will be negotiated with Aviagen. Gary myself, speaking with DAFF, I think that it is the best thing we can do.
Relief.
That burden of spending ZAR 370 million on a GGP facility with quite long negotiations, and we're almost 90% there, Gary. We're transferring the farms we bought to them, and they're going to spend the capital. And the key thing is part of that was to try and keep the GGP flock in this country. There's only seven countries in the world that have GGP flocks. South Africa is one of them. And that is due to our negotiations with Aviagen. So a huge positive, not just for Astral, but for the country to have GGP flocks. And then, of course, the spare capacity, and you should understand how important this is. If you want volume growth and price growth, we now have the capacity to grow our volumes because of cutbacks and previous capital expenditure. So a nice position to be in.
In the past, I was often asked, "Where does your growth come from?" And we run at full capacity. You benefit from that, from the dilution of your fixed cost. We're not in that position. We carry some cost due to that spare capacity. And Dries explained that to you. But this is a positive over the next year or two that we can most probably put down another 600,000 birds per week without spending any capital. And it will be the whole integration of the breeding companies and the feeding. So that goes well for us.
In the near future.
That is a quick view on how we see the future or the near future, and it's been endorsed by our board. I thank you for your time and taking interest in Astral. There's now time for questions and most probably answers, and if we can't answer any of your questions today, we'll get back to you in due course with a decent answer, so thank you, Marlise. Over to you.
I think questions first from the floor.
From the floor. Okay, let's start. Frans?
If there are no questions.
Is there any questions from the floor? I know some of our shareholders, investors, fund managers, market analysts, and some of the people in the room. We'll see later today and tomorrow. We've got scheduled, I think, 16 one-on-ones. So I'm sure we'll get a lot of questions from there. For sure.
Morning, Chris. Just a question. You put the slide up in terms of price inflation, selling price inflation, and then you went into quite a lot of detail around the discounting component. Is that the single biggest factor of the price deflation? Sorry, not inflation, price deflation, or is it as a result of inefficiencies in your competitors? And let's call it government-sponsored programs and certainly of the entities where they're selling chicken below cost. That's putting pressure on the market.
Thank you for the question. I must be careful how I answer that. But yes, we like strong competition that don't just sell on price, that sell on quality or innovation. Unfortunately, chicken is regarded as a commodity, and the retailers want it to be a commodity. We believe there is space for high-quality branded product. But I think with a slight overproduction, the retailers will always have the pricing power. And most of that deflation, if not all of it, was brought about by the competitive landscape from the retailers and wholesalers fighting for the customer and for the shelf space. And the prices were pushed down to us from the retailers' side. And as we stand here, we're now asking the businesses to sell the product. I'm sure they're probably back from the low and are asking us for input.
But I think the board really understands the role of the regulatory change around 120%, especially with regard to private farmers running businesses that are not really working for them. And that's because. What's the question of the land and stuff, not the selling price. If they go and buy from me for one Rand next week, they have double as the consigned cold storage. So the strategy from a number of medium-sized to big integrators, medium-sized suppliers in the market, is just to encourage local retail products, but cost and private cost, the contract is to be really delivered from point to point in the system. [audio distortion]. Buy property as you can in the 30 years from now.
First, you pay tax to the benefit of the company. If you make this in profits, what interests you is the fair split between the retailers and shareholders. And the interesting is that the board set up their price and the financial price factor, chicken price was set by the retailers' clients, but they were then working price chicken price. We put the margin of 1.3% as that was intended. We don't do that in the retailers' market. It's something internal. I'm sorry, I didn't quote you anything. But it is the right price to supply. So it's a fair price. It's a fair price to supply. And we have an exception around what is the primary price for communities. We've got to sell it. We've got to defend it in the retailers.
That's why to cut back and sell out of stock is to get you in a position where you have more than decent stock. If we did a negotiated price for the retailers, if you have some labels that you know, you just get the labels out. So you're going to buy a good price in case that the market is trying to really abandon the retail stock and get a little bit of outside stock storage. So there's always a better place at the time than that is when you're doing that. We have to get out of the Meadow Feeds. I guess my wife and I find that if you're carrying a full truck on eight weeks, there's like most of the probability of reduction in negotiating.
If the negotiating goes to return to the levels in 2023, you as I'm sure make a loss or you're dependent on getting the ones. I think the negotiating factors are that we've done that with some of the negotiating in the retail industry going on. So we're using the stock feed. We've got to make the reasoning and sell it from time to time. So you have to generate the spend and the requirement for those outlets. We just fully address it. So if you need a reason that you spend the capital, we still have a case for prices being raised in the retail markets, which will certainly apply to production costs higher than the cap in the retail sector in the retail system. But the thing that probably these people not trying to do would be to push it because you cannot scrap it.
You have the re-pricing based on cost, and at the bottom of the list, we're going to fulfill ZAR 5 million rand values of feeding the animals in the retail, but the big cost in the budget here was obviously the additional feed for the birds and the cost of poultry from the store, and then there was the idea of staying for three months in the field. The best situation was the back of the bikes and making 4,000 liters of alcohol efficiencies on the tenth. I think it was the 16th of June. Last year, we put 200 shoes on the board and the rental rates were 9 ft. [audio distortion].
[audio distortion] to get it to a feeding facility, so we're focusing on those four alternative sources to get the capital in this situation.
Was the particular result of sort of higher up the value chain, not reacting force enough, whether it's taking capacity outside of the value chain or for not having those exit ports, in addition to not having the diesel generator capacity in the store and the line of power? Yeah. I'm not. Any questions? So we have the emergency meeting on 18th of the month. That's the last thing you want to do is not be able to meet because that's what we do. So you want to wait till the last minute before you make a call if you should cut back. Cutting back is not just replacing chicken for the animals. It's not replacing the food dollaring, but that food dollaring is the top cost of your GGPs to your GGPs to your products. So there's a cost to it if you don't replace it.
You're going to buy your chicken with the energy in terms of the cost of cutbacks cost you in. So you should have to replace it as far as you can. That was in December 2022. We're coming to the realization if you don't do now, you're going to cost. So that will be a massive cutback program at that. We simply reduce the retail price to beat 2023. That shackles the product. And then if you process the quality of the bird, we're going to use the bone chicken of 4.5 kilos with a market price of ZAR 1.79 million for that bird. We're going to make two years of.
People can buy on weight, but they sell portions.
So they pay for a drumstick this size, but they can only sell it for a drumstick that size. So that knocked us. And in hindsight, and we did unpack this, we could have or should have made that call earlier. But that's hindsight only. What if you cut back and you move from stage six to stage two? You look like a fool. You look like what I look like every day, what my chairman tells me. Egg on my face. I hope that answers your question. Thank you. Any more questions from the floor? Well, if not, I thank you. Marlise, any questions from.
My mother or.
The first question comes from Sumil Seeraj from Standard Bank. Good morning. Thank you for the presentation. On slide eight, load-shedding costs add up to circa ZAR 1.25 billion, and were added back to the full year 2023 EBIT base. But on slide seven, circa ZAR 1.85 billion in load-shedding related costs were incurred last year. How should we think about the difference of ZAR 600 million? Where was it spent?
Rishu, unpack that. So we go to what was the first slide eight?
The first slide eight, that's correct, ZAR 1.25 billion versus ZAR 1.85 billion on slide seven.
I do not really follow the question. I see the slides, but what is the question? The difference between how we depict that?
Yes, the ZAR 600 million difference.
Rishu, you want to reply to that now? We're seeing some mill later today. Do you want to when we do the one-on-one, this is going to take most probably a long explanation. We've got the answers. And if we see some mill on the one-on-one, it's not an easy. It's quite a complex answer. We've got the answers, but.
That's right.
Thank you, Sunil.
Shaun Hose from Bateleur. If I heard right, Gary mentioned that there is still a small feed cost advantage using current maize and soya prices. Is this correct? And is this relative to the average input cost incurred during full year 2024?
Can you hear me?
Am I on? Yeah. Good. Thank you. Look, it depends where you're positioned with your raw material. So at these levels and SAFEX trading at ZAR 4,900 a ton, we're not—we are not in a position where we have to participate. We buy forward. We at least have to have a three-month pipeline of maize secured for our factories on delivered contracts. So trading at ZAR 1,000 a ton premium to the new season next year is expensive. There will be a difficult period with the old crop on the tail end of the old crop, so March and April, but certainly not covering feed prices now at these levels. Replacement cost is obviously a consideration in buying forward.
Shane Watkins from All Weather Capital. Chris, I want to congratulate you on a really extraordinary career. You have been an exceptional CEO, and we will miss you. My question is on imports. What is the current level of imports, and what is the outlook for duties on dumped products in the next 12 months?
Shane, thanks for the question. I have moved to that slide. You can see September was just over 30,000 tons a month. In that, there is still a large portion of what we call mechanically deboned meat. So about 60% of that number is mechanically deboned meat, not produced in South Africa, with a balance frozen bone-in portions. The outlook for the tariff structures remained pretty much the same. The anti-dumping duty, which was implemented in August last year, still has just over three years to run. It normally runs for five years. It was delayed by 12 months with implementation. So let's say three years left there. A sunset review on the U.S. anti-dumping duty was completed in the year. That's in place. And the countervailing duty on frozen bone-in portions and boneless cuts at 62% is in place.
So don't anticipate any change in the tariff structure or the tariff environment for the next year.
A follow-up question from Sean Hose. What is Astral's current poultry production capacity versus current production volumes?
Okay. So our capacity with capital invested over the past couple of years is close on 6 million birds average per week. With a couple of small changes, you can take it to 6.1, 6.2, but the stated capacity is 6 million. Currently, we're processing 5.4 million birds on average per week. So there's 600,000 spare capacity. And with a bit of spend, we can take it to 6.2 if and when required, if the market allows that.
Thank you, Chris. Rajay Ambekar from Excelsior Capital. What is the current split of feed costs between maize and soya? And is there any room for further optimization?
There's a slide later on in the pack, additional information. So that is included in the slides that are loaded onto the website. You'll see the progression or the inclusion of maize and soya over the reporting halves. Maize is at a slightly lower inclusion in the rations right now, as we have benefited from the price of soy products, full-fat soya, low-fat soya, soy meal, but more particularly soy oil, which came off significant highs last year. So the balance of the or the source of nutrients, particularly energy, has moved more to soy and a digestible or more digestible energy source and fat away from starch and carbohydrates and maize. But those slides are included later and then additional information, and if there's any further questions around them, we can answer them. Thanks, Marlise.
Thank you. Follow-up question from Rajay. You commented that there are some signs of a tick up in the consumer. What do you ascribe it to?
I think that there are some benefits, small benefits from the inflation rate coming down. I think the informal sector, we often talk about this. We investigate. We ask questions. I think the informal sector that are sometimes regarded as unemployed is much stronger in this country than what we believe. I think a lot of the spend comes from that side. Also, there's been a small uptick in the employment rate, however small. In general, people were buying down. You can see that people are not buying new cars currently if you check the data on that. We think there's slightly more disposable income available at this point in time. Now, chicken is in that space where people have 5 or 10 or 20 a month extra to spend.
Chicken is one of the options, one of the go-to products that they go to. So maybe we see a bit of an uptick before other industries will see it.
Thank you, Chris. There are no further questions.
With that, I thank everybody for the questions and the answers. My Chairman, Dr. Theunis Eloff, is here. He just wanted to have a closing word. I apologize in advance.
Yes, I have to correct some of the things Chris said. Colleagues, we thought it appropriate to, at this point, say goodbye and say welcome. And first, I must say that the board and my fellow non-execs and the execs are very proud of the results in our team. You can think of, you've heard where we came from. And they did it basically in six months, consolidated in the rest. So very proud of that. And I also want to welcome our excellent auditor, Seb and Yvonne; they're in the back. It's not usual for auditors to attend these, but Seb and Yvonne, you're welcome. Thank you. Also, their first year of a full audit. Chris Schutte, most of you know for a very long time, at least behind this podium, often walking to and fro.
I don't think I share anything new with you to say that there are many attributes I can give him, but I think the most important one is that he's a straight guy. And honest. What's nice about Astral, and as a board, we appreciate that. We don't ever have to lie or hide facts or put them into the statements here at the back with a footnote. We are what we are. It's, on the one hand, a very complicated business. On the other hand, it's easy. We have feed and we have chicken, and we feed the chicken, and we slaughter them and we sell them. But it's obviously not that. And in that sense, it's nice to have a CEO that leads from the front, being honest and straight. He's also humorous, good sense of humor. You see that? I'm actually surprised.
Chris wasn't as humorous as always. Perhaps he thinks it's a solemn occasion. But the point is that Chris has driven Astral and the Astral culture of hard work and when we needed a bit of play also. And I want to ask you to thank him with me for the time that he's been with Astral and in the feed business, more than 40 years. In his own words, he has no regrets. He's cutting it off. He's staying on as a consultant, as you know, for another year for advice and so on, and to help with the transition to a new CEO. But please join me in thanking Chris and wishing him well. Thank you. Second goodbye is to Frans. You've also come to know Frans the last couple of years. And we're very sorry to see Frans go. He's a solid manager, executive.
He's had a rough time, as all of our executive team has had, but he's had a particularly tough job, among others, he has to deal with retailers. Frans, we're very happy that you're not going into any of our competitors. Frans is going into nuts. I hope it doesn't drive you nuts, Frans. But we really wish you well. It's also nice at an executive level to be able to say goodbye on a very good footing. We understand. We're sorry, but we understand. All best. Ritesh is here. You've come to know Ritesh. I think it's his third presentation, if I'm correct. Now that Frans will leave a vacancy, we're looking at a bit of restructuring. Ritesh's role will be very important. Ritesh, thank you for what you've done and for what you will do. That's a promise.
We are very fortunate to have a stable board, small board, only six non-execs, working fairly hard, all of them on committees and some of them on more than one committee. And I think that's part of what Chris and I decided we should do. We should have a good transition and make sure that the board remains stable in this time. And with Chris's successor, we've had a very good, thorough, intensive process, transparent process. We also looked outside. We made it clear to the inside guys, it's not that we don't trust them, but we think that our shareholders will at least want us to look outside. And I don't know whether it's fortunate or unfortunate, we couldn't find anyone coming close to any one of our internal candidates. And so we interviewed no one from outside. We went for the three.
I can say now Frans was one of those, but he withdrew from the process. It was a 360-degree process. We also, in that 360-degree process, where you get feedback from people you work with, from people you report to, and from people reporting to you, we just realized as Astral how sought after our people are. Many of our people at that level gave feedback saying, "We are almost monthly contacted by either headhunters or others from other companies, not just in the poultry sector, but outside." We've realized more and more, and we are realizing that scarcity of skills, high-level skills, management skills, other skills is going to be a factor. It's becoming a risk, probably not just for us, but for the rest.
Through this process, Gary, present Group COO, was unanimously selected and appointed first by the nominations committee and then by the board. Again, you know Gary almost as long as Chris. He's been with the company almost as long as Chris and in the industry. Gary will have, as he knows, big shoes to fill. Fortunately, they don't look too much different when you look at their shoes. Gary knows that. He knows that he will have the support of the board and he will have the support of a team. Gary will obviously have his own style. No one can be exactly and should be exactly the same as your predecessor. I think that the English will probably be a bit better in the presentations. Sorry, Chris.
I think Gary will have to work on his jokes because Chris brought something to these presentations, the jokes. So Gary, there's a development area for you. But I always say, in English, to say good luck is nonsensical because luck has nothing to do with what you do and what you achieve. So Gary, for you, I want to say sterkte. For those who are very English, strong is more or less what sterkte means. Luck doesn't have any place in Astral. You know that. This is a tough business. It's a volatile business. And Gary, we have faith in you and your team to pull us through. And we'll see you in six months' time with the first set of results. Gary thinks he's only starting the 1st of February, but basically, the year started on the 1st of October.
So he has three months already gone and another three months to come. But thank you very much. And again, thanks for those of you who are here. We understand that some people can't be here, but I must say, after COVID, it's nice to see people face to face. On a personal note, thank you for being here and enjoy the day. Thank you.
Just for the people, Dr. Eloff spoke about boots and shoe sizes. For those of you who don't know, I wear a number 12 shoe. I thank you for doing this journey with me. It's been very eventful. Thank you for everybody, not just the people that work with me, but all the stakeholders in the business. I thank you for this road up to this day, 42 years. As Theun said, I leave with no regrets. As Frank Sinatra said, regrets, there was a few, but then again, too few to mention. I thank you very much. Goodbye.