Welcome to Astral Foods Limited's Interim Results Presentation for the six months ended 31 March 2025. A special welcome to our Chairman, Dr. Theunis Eloff, our Non-Executive Director, Veli Potgieter. This results presentation is definitely not the first for Gary Arnold; however, it is a first as CEO of Astral. Although the group faced numerous challenges this year, the cash position and the dividend declared are very positive. A couple of housekeeping rules after the presentation: if you would like to ask a question, please click on the Request to Speak icon at the top right of your screen to ask a question verbally. Please use the Message tab at the top left of your screen to type your question, and I will post the questions to them after the presentation.
I will now hand over to Gary Arnold, CEO, and Dries Ferreira, CFO, who will be taking you through the presentation. Thank you.
Thank you, Marlize. Can everyone hear me okay? Good. Good morning to you all. Marlize has already welcomed you all here. A special word of welcome to Theunis Eloff, our Chairman. Veli Potgieter, welcome, Veli. Good to have you here. There are a lot of people online that we cannot see today, but welcome to you all as well. We look forward to the engagement with you. They typically say your first 100 days in office is a reflection on your performance. I certainly hope that this slide is not a reflection on our continued performance. There are a couple of red arrows here today. They also say that first 100 days is used to set direction. We are going to try and turn these around into green arrows, up arrows. Dries?
I wasn't—I'm not sure if I'm supposed to tell everyone, but it's your birthday today. Did you say we can tell everyone or we shouldn't tell them? We agreed we shouldn't tell everyone. Okay. So happy birthday, Dries. But welcome, everyone. Look, six months we're reporting on headwinds. I think it's a story that a lot of those that watch the poultry industry over the years have been familiar with. If input costs are up, particularly feed price, which is the largest part of live cost, and you experience selling price deflation or selling price pressure, the margins in the poultry industry are typically so thin that they disappear. And that's the story here today, and we'll fill in the color without making it too simplistic. But positive, some revenue growth for the group over the six months, this driven by an increase in poultry sales volumes.
Sales volumes up 4%, 4.4%. We had an increase in feed sales volumes as well. Both of those serving to increase revenue for the six months. Unfortunately, the earnings under pressure, profits down to ZAR 271 million of the prior six-month comparable period at ZAR 550 million, down 51%. Some work needs to go into that, and we will paint—we will give you a little bit of a view of how we see the future later in the presentation. Headline earnings per share, 409 cents per share, down 54%. Positive news for the period, cash up to ZAR 259 million. You will remember through 2024, our task was set to claw back the losses that we experienced on the back of load shedding and bird flu in 2023. We closed that year with just over ZAR 1 billion in debt, finished 2024 with ZAR 13 million in the bank.
Pleased to say that we have topped that up further, ZAR 259 million. Continued focus on working capital, capital allocation for capital expenditure, and obviously going forward, profitability needs to positively contribute to this, but continued focus on building cash reserves on the balance sheet. With that in mind, our board, on our stated strategy or cover of a 2x cover, agreed to pay an interim dividend per share of ZAR 2.20 per share. We resumed dividend payments at the end of last year, November, and that was paid in January to shareholders. That was after a tumultuous time in 2023, and as you know, clawing back all that debt in 2024. Returned to paying dividends and declared an interim dividend of ZAR 2.20. This period was characterized by higher poultry feed costs, thus driven by higher maize prices. It is not new news.
Last year's El Niño conditions and the drought that South Africa experienced severely impacted the maize crop last year. For that harvest season or that season, producing a crop of just under 12.8 million tons. We exported a lot of maize regionally given the drought conditions in sub-Saharan Africa. We ended up with a very, very tight old season balance sheet, tight supplies, and with strong demand for our maize. That only served to drive up the maize price. The maize price for the first six months, higher than that maize price we had in the comparable period of 2024, leading to higher feed prices. On farm broiler performances, we'll talk a lot about later. Very good. In fact, setting new records there. Our farming division doing some good work on the farms. We continued with lower broiler numbers in production this year.
Last year, you may recall we had reported that we had actually reduced the production of broiler numbers, and this to better align our own stock and supply with demand in the market. Softer demand we experienced through the year. Astral, given a stock situation and the supply into the market, we reduced our broiler production numbers. However, that is not something that you want to keep on doing forever. It does not help your fixed cost base. In a business like this, where high volumes through the plant are important, commoditized nature of our product, frozen chicken, you want volumes through your factories. We have, through the first six months, kept the production volumes more or less where they were through 2024. Slightly higher, but more or less in line with where they were in 2024.
With that, we were able, at the same time, to increase our sales volumes, particularly over the festive period. Very good demand for frozen chicken, which continued—that momentum continued into January and February of this year. We sold a lot of product out of stock. That helped our poultry inventory levels and, of course, helped improve our working capital. A lot of the cash that you see came out of this, about ZAR 200 million out of poultry inventory, which Dries will reflect on later. I finished good stock levels, comfortable, and certainly a lot lower than they were 30 September 2024. It was one thing to sell all this product, but unfortunately, it was at the wrong price.
Tremendous retail promotional activity out there through last year, you know, with the various promotional sales drives that the retailers put out there, Black Friday, Red Monday, you name it. For yourself, you would have seen the pricing levels on shelf. Through 2024, the industry, in particular frozen chicken, I think it's well reported, and Anthony's commented on a number of times. You could see the price deflation through the year in frozen chicken. IQF pricing in January last year started decreasing, decreasing and decreasing, and I've got a slide that we'll reflect on later. That did not do us any good in the first six months of this reporting period. Negative broiler margins. We reported in November that our second half broiler net margin was a paper-thin 0.2%. It's not a margin. You're not making money at that level. That disappeared.
We said that there was a risk that the margins were under severe pressure, and given the outlook with higher feed input costs and the selling price pressure that we were under, that there was a risk to the margins being wiped out. We finished the six months with a broiler net margin of -1.1%. Certainly not sustainable, and we'll show that on the graph later on. Embedded diesel and water supply costs. Unfortunately, we talk about an embedded cost here now. You'll see we do not even have this on the waterfall or the graph where we show you the movements in profitability for the six months compared to the prior six months. This is about ZAR 10 million a month. On average, ZAR 10 million a month, which is more or less what it was last year, ZAR 60 million for the first six months.
That is not on national load shedding. It is on all the municipal interruptions. That is the power cuts in the municipalities, disruptions in supply of power in Standerton, and still having to get water to your facilities at an enormous cost. The municipalities certainly need to step up and supply what they should be supplying. Stringent focus on working capital through the six months. Dries will paint the picture around that later. The feed division had a good six months, contributed positively to the group's results, and we will unpack that a bit more. The cybersecurity incident. A predecessor, Chris Schutte, said after 2023, thought he had seen it all. I phoned him in early mid-March and I said, "Chris, you know, maybe you said you had seen it all. I do not think you have seen it all. I have just maybe seen it all.
I'm not sure what can come next, but now we've got to also worry about cybersecurity. Probably a little naive, although it was there in our business risks. We had monitoring systems. We had layers of security. These guys still managed to get in. Fortunately, we were able to limit the extent of the encryption on our servers. It was a ransomware attack. They post a nice little notice for you if you want to buy this tool to unlock this all. You go over here. Yeah. Obviously, we didn't do that. Our business rescue with disaster recovery plans in place. However, it cost us ZAR 20 million. By no means a small cost. Two of our major processing plants, County Fair and Festival, were down for two days. That's lost fresh sales. You don't get them back in the week.
You know the story, what happens with the chicken that you do not bring to the plant to slaughter if it stays back on the farm. If we can remember 2023, they get bigger, they eat more feed, and then you have to catch that production up somewhere. Additional shifts, overtime shifts to catch the backlog up, and they did eat more feed during that time. ZAR 20 million, significant amount of money on the earnings for the six months. Positive out of this is I always believe turn a negative into a positive. We have been able to or have embossed our systems even further. This is an ever-evolving landscape, and I think one needs to keep up with the protection on your servers and your network. We have managed to improve the protection of that environment.
This is the movement in profitability for the six months. You can see the first half of 2024, and I'm just going to move forward a little bit here. Very strong first half. Astral in that year following 2023. Good turnaround in performance. If you look at that performance relative to the first half of Astral's history, you'll see that that was a very strong performance for the group. This is where the pressure came. Not being able to get that selling price up to the same levels that we had in 2024, ZAR 300 million was the downside to the results for the six months. We did increase volumes, as I said earlier on, 4.4%. That was sales out of stock, positively contributing to the group's earnings on the comparable period. Feed prices increased.
The drought, higher maize prices, higher feed input costs than the first half of 2024 resulted in that. Somewhat offset by a better feed conversion efficiency. We improved the broiler performances further. This was a, and we'll talk about it later, but the feed conversion achieved here is a new record for the group. In other is all the other overhead expenses and movement and admin costs, profitability in Africa, profits within Meadow, all the other movements. You can see ZAR 21 million other movement resulting in the ZAR 271 million for the period under review. Certainly impacted significantly by this inability for us to move selling price, cover input costs, and Astral actually subsidizing the cost of producing chicken for the six months. This is the graph with the broiler net margins. We share this with you.
It is the margins that without the breeder revenue or the breeder contribution included. You can see exactly what happened in the broiler market. 2.4% for the first half of 2024. This was the load shedding bird flu crisis period. Recovered margins to 2.4%. This little dot here was on the graph in November when we presented the results. 0.2% for the second half of 2024. Facing the prospects of having to get the prices up by at least ZAR 2.50-ZAR 3.00, that is how far behind we were in October last year due to price deflation in the market over the period, over the year, resulting in a -1.1% broiler net margin. Dries later will talk about the impact of the movement in feed price and selling price on profits. This really is a graph that tells it all.
You can see this is the broiler selling price index from a point in time plotted against the SA food price index and poultry's in this basket. This is a selling price inflation and the price levels we enjoyed in December, January, November, December, January, first half 2024. From there, you can see what happened to poultry selling prices. From June, continued that spiral downwards. Our task here was to try as best as we can to recover selling prices going into this first half of 2025 with higher input costs. We did get some selling price improvement going into the November and December, but not enough. Not enough to cover the costs satisfactorily. This is a mixed effect. Typically what happens over that festive season is people will buy up. They buy frozen chicken.
You then go into the new year, you sit with some tertiaries and offal, and you have to move that. Prices come under pressure in the new year. In the mix, we saw some pressure on NSV as we moved various product lines within our inventory. In February, March, tough discussions with the retailers to get prices up further. We were able to get prices up a bit here, but it is a discussion that continues with the market. One cannot produce chicken at a loss. Our work has to be done on the cost side. Of course, that goes without saying. Astral's got a best cost-rated strategy, but then you also need to recover inflationary type costs in the market. This graph typically would tell the whole story. This is the year-on-year, month-on-month movement in the broiler feed price and the broiler selling price.
You can see in the first half of 2024, we had this promising or this good increase in the selling price on the comparable months in the prior year. This is all positive movement. The momentum is up. From December, January that year, the momentum turned around and went down. We had on the back of a very good maize crop in 2023. We enjoyed good feed price levels through 2024, but then this started happening. In November, this little blue bar there was on the graph. If you go back to the results presentation. On the 2024 maize crop and the drought and the tighter supplies, we saw the feed price start increasing as maize prices increased on SAFEX. At the same time, the momentum and selling price slowed down. What happened through the six months? That continued.
We saw lower selling prices on the same months in the prior year. Negative movement in selling price, but feed prices continued their run. That was on the back of a very tight old season crop, which we'll talk about more, a little bit more just now. That little blue bar shows some positive movement in selling price and feed prices we'll talk about. Raw materials, I'm not going to reflect in too much detail on the balance sheet, but to say that the old season crop there at 12.8 million tons, small crop on the drought, high exports. A lot of this maize going into Zimbabwe and the region, Namibia, Botswana. You can see that we ended the year with a much smaller stock-to-use ratio.
In fact, I think this is not really a very good reflection of the amount of maize that's left in the silos in the country. People are literally scraping the bottom of the silos with this late harvest season due to the wet weather. Everyone's scratching around for maize. Very tight old season crop that has kept prices well inflated. We'll see on the graph just now the impact of the later planting season we had as well on SAFEX. Forecast for the new crop, 15 million tons. Looking good, yields up. Not quite where they were in 2023, but the yields are up and a good crop for all intents and purposes for 2025 that they're currently harvesting, which will ease the balance sheet up somewhat.
You'll see some loosening up of this balance sheet, which should translate, if we trade local fundamentals on SAFEX, should translate into better maize prices going forward. This is the maize production and yield. You can see the improvement in the crop. Yields up to 5.7 tons per hectare. Not as great as we've seen previously. This was due to a little bit of damage in the early plantings this year with the late rain. There was some panic that the rain was not coming. It was late. Some early impacts there on the maize crop. This is what happened. Tight old season supplies, very, very tight old season crop. In December, January, everyone started panicking. It was not raining. Farmers had started planting, albeit a bit later. Prices railing up to over ZAR 5,700 a ton on SAFEX.
Now you have to position yourself somewhere in this volatility. There were higher maize prices for the first half of 2025. Came off those highs. It started raining nicely. The crop looking good, rated good to excellent. Then Trump, budget one, budget two. A little bit of friction in the government of national unity. The rand moving to ZAR 19.90 mid-April did not do us any favors. The maize price once again jumped. Now you are sitting there and watching this board and you are wondering, okay, we need to start covering some more maize. Fortunately, since then, we have started trading a much better rand. ZAR 18, it actually went below ZAR 18 yesterday. We have seen the farmers climb in and start harvesting, albeit late. They are now in and some harvest pressure coming to the maize price here.
We could also book a ship somewhere in the near future for a September contract, and then that could put some more pressure on this price. This is a good news story. Soy meal globally, balance sheet very good, good supply and record crops out of South America, US good crops. No concerns around soybeans, and you can see that's benefited global prices. Chicago benefiting from this. Of course, we've been able to flat price soy meal in South Africa at decent levels. This is offering some benefit in the feed price going forward. If you look at our second half to where we were last year, this offsets some of the higher maize prices in the first half as well. Not enough though to reduce the feed price or at least keep it level with a comparable period.
The feed division, we've said very good, strong set of results from the feed division. Revenue up 9.4%. This is largely driven by sales volumes up 5.9%. Selling prices up and that on the back of higher raw material costs. Meadow Feeds performing well for the six months, a net margin of 5.6%, below inflationary increase in expenses. Well-controlled expenses. We increased the ZAR per ton margin for the six months. This margin increased more or less in line with, was slightly higher than inflation. Good performance from the feed division driven by sales volumes internally. That is feed sold to ourselves up 4.9%. Two reasons for this. Primarily the increase in feed going back to our broiler breeder or parent flocks. In 2023, we culled a lot of birds on the back of bird flu. We then replaced them through 2024.
The feed volumes that were lost in early 2024 were going back now over the period. All things being equal, volumes back to the poultry division, back to normalized levels. Although we did make a decision in December to increase our broiler placement numbers. Some additional feed coming through there on higher broiler production numbers. External feed sales increased. Again, recovery in the commercial layer sector. Table egg farmers going back, replacing birds that they'd lost in bird flu. With some risk mitigation, we went back to that market or sector and were able to start resupplying it again, or rather some risk assessment. We went back to that market and again sold layer feed into the table egg sector and some growth in the pork livestock sector. It's a split of volume.
No major movement here, more or less flat year on year, just with the growth in volumes at 5.9%. The sales mix pretty steady in the feed division over the six months. The poultry division, this is a consolidated poultry division between commercial and agriculture. You can see revenue up 1.5%. This was driven by the increase in sales volumes, primarily on volumes out of stock. Reducing inventory levels for the period, certainly not driven by price. Selling prices for the period down 3.1%. As I said earlier, we went into October well below pricing levels in 2024. In fact, if you look at this, well over, well over a rand and more below where we should be. At times, as I said, up to ZAR 2.2, ZAR 2.50 below where we should be. Breeder revenue was down.
In this division is Ross Poultry Breeders and National Chicks. National Chicks supplying the market, both ourselves and the external market with broiler day-old c hicks. Their revenue was down due to one reason. They sold less volumes through the six months at a lower selling price. In 2024, we were still importing hatching eggs from Brazil on the back of the bird flu crisis in 2023. Those eggs were at a higher cost, so we had higher selling prices on day-old chicks and we sold more. There was good demand for broiler day-old chicks in the market last year. We did not have that same environment this year. More or less normalized earnings in the breeder operations. This is what selling price and the higher input cost did to the poultry division. Decimating earnings, negative margins as we reported.
For the poultry division, nearly a break even there, but - 0.3%, certainly nothing to write home about. This is where the focus is going forward. You can see that feed prices were up 2%, sales realizations down 3%. This is about ZAR 170 a ton, that increase in feed price. We have covered the sales out of stock. This was driven by strong demand for IQF on extensive retail promotion activity. That is an important comment. Very strong demand, but driven by a price point in the market that did not allow us to recover input costs. You have heard this before, I think, Anthony, you know, covering the market for a long time. It is one of those periods where, you know, with the volatility in this industry, if you do not recover, you cannot recover costs in the selling price.
The pressure on poultry margins being so thin just disappears like that. So very sensitive to selling price and obviously the cost base. Production cutbacks we've spoken of, broiler margins decreased to -1.1%. Again, you know, off a paper thin margin in 2H24. I think the margins dress for the year, F2024, 1.2%. So, you know, very thin for a business of this nature. And just with this pressure and volumes, selling price, that wiped it out. Operating expenses in the division increased in line with inflation, driven by energy cost, personnel costs. Our finished good stock levels, however, 31 March was substantially lower than the end of 2024. So that's positioned us well going to the new calendar year and our second half. We look at sales mix. So on an increased volumes, you can see nothing changing a lot.
IQF 57% of our mix value added, small improvement there between QSR and value added. Fresh on higher volumes at 13%. So some growth in fresh. There was, however, also quite a lot of pressure in the six months on fresh pricing. That's the sales mix for the poultry division. Agriculture, deal with this quickly. We've spoken about what happened to the sales with the National Chicks. What happened in Ross Poultry Breeders? Last year there was a lot of producers out there in the external market and ourselves as an internal customer restocking of the bird flu. Strong, strong demand for breeding stock, parents. This slowed down as everyone replaced their parent stock. For the first six months of this year, also with some disruption in the demand for parents in the industry, slightly lower parent stock sales for the six months. Feed input costs increased.
We've spoken a lot about that. The broiler efficiency is reaching again an all-time high. Age reduced here. This is seven hours. Age reduced by about seven hours on the slaughter age, but maintained body weights. The broilers performing well in terms of their average daily gains. You can see good performance there. This is the graph where the benefit came that offset some of the higher feed price. We had feed conversion gains or feed conversion efficiency gains in the first half of last year. This is about 20 grams of less feed for every kilo of live weight gain. Good performance from the farming division and mortalities well controlled. Industry matters. I'm sure there'll be some questions here later. Quite topical yesterday in a couple of areas.
Imports slightly down for the six months, but not something we reflect a lot on these days. It is stable at about an average of 30,000 tons a month. If you look at the imports for March, about 60% of this is MDM. Small part of it, about 5% is frozen bone-in chicken. Under control with the tariff framework that is in place. The anti-dumping duties are there to prevent dumping, which used to be the core industry had. Normalized imports. I think we should not fool ourselves that there is no imports necessary. There are. There are certain products that the importers need to bring in to satisfy local demand. Based on industry statistics, the industry producing around 21.3 million birds per week in December 2024.
Now there's at least another million birds in pretty easy capacity available in the market that the market can bring back. In June last year, the industry produced over 22 million broilers, 22.5 million if we cast our minds back to the presentations then. Certainly space to grow volumes further, which I'm pleased to say is something that Astral is participating in. Imports are 31,000 tons. That's about 5.5 million birds a week. Sizable, but bearing in mind that the whole bird equivalent, a lot of that sits in MDM. Vaccination. Shane, you asked about this earlier. It has been delayed. I think the only positive that I can say is that there has been some movement from the minister's office. SARP has been actively engaging with his office to improve collaboration around this point.
You know, we have quite a number of applications in with the Department of Agriculture. We believe we've ticked all the boxes. We to date though haven't received a permit to vaccinate. This is something that will give us an additional tool in the tool bag and add to our biosecurity. It's not the silver bullet, but it at least will protect your flocks from having to go in and cull them all. It will impact the quarantine status of that farm. You will not be allowed to move eggs off there for a certain period of time. Once you immunize these birds and if they turn positive, they've got immunity. They've got built-up immunity. They will turn negative again as they fight off the disease. Like if you get flu or COVID and you had the vaccine, same thing.
The farms will be under quarantine for a period after which it will be lifted and we can then again resume the supply of fertile hatching eggs to our hatcheries. This is delayed and we certainly hoped it would be in place for this winter season, particularly in the face of still no compensation and now no insurance cover available to the industry. It is a concern. The AGOA poultry import quota. We know there is a South African delegation together with the President in the U.S. this week. Through SARP, we had a discussion with Minister Parks Tau on Friday around this. You know, with the tariffs that have been implemented, theory. This was negotiated. Was there any change to the tariff structure? This quota should fall away. Certainly if there are AGOA benefits, the preferential trade access falls away. This quota should fall away.
Very small amount of poultry actually coming in under this quota or any poultry from the U.S. at all given their bird flu status. A few hundred tons in the first three months of the year. Given their health status, not too concerned. I mean, if this falls away, any poultry that comes in will just be subject to the anti-dumping duty. For the country, this is a point we'll talk about later that we're concerned about. We have a SARP requested that the minister, before they agree to any perhaps changes in the tariff structure, regime, quotas, that they talk to us. They have agreed that they will make sure we have a seat at the table as we did in 2015. We're on budget episode three tomorrow, I believe.
You know, we made an extensive submission to Treasury to get chicken in some form or other into the VAT-free basket, zero VAT basket. We were initially successful with offal. Disappointed that we couldn't, didn't see frozen chicken in there. That was all revoked with the spat over the VAT issue. I'm now going to hand over to Dries to cover the financial overview. Thank you, Dries.
Thank you, Gary. Good morning, everyone. Thanks for coming through. Just an interesting note here. It's clear that we've got good penetration or wide audience because here is a message from someone, a happy birthday, Mr. Ferreira, wishing you a wonderful and prosperous second half to you and your colleagues. SARS Large Business Centre. Yeah, they're clearly listening. I'm also going to stand in front of the podium here.
I'm going to take you through the consolidated income statement, balance sheet, cash flows, and just some pertinent matters around the results. As Gary has outlined, we've got a 3.5% growth in top line revenue made up by volume and price growth, good support from the feed division, good volume growth in the poultry division, but unfortunately, as Gary said, at the wrong price. That you can see translates into a 51% decrease in profitability, where the profit contribution, where we had good profit from the poultry division in the comparative period, it got wiped out in this half. Operating profit margin coming in at 2.5%, well below our long-term average. We tend to talk about a roughly 5%-8% and aiming at the 8%, obviously at the higher end, even though we never get to an 8%.
It's either more or less, but it averages out around there. You can see last year we had a 5.3% margin, which was a healthy profitability for the first half. Interest cost came down very nicely in this period, mainly driven by the fact that we were able to claw back almost all of our debt in the first half and we were during the period, and then we closed off with a good cash balance at the end of March 2025. 71% improvement in that net finance cost line. We've got the included in that, we've got the lease finance charges. It's the right of use assets and liabilities, the long-term leases. You will see some movement on that line as we've capitalized a right of use contract where we've entered into a long-term logistics contract again with one of our suppliers.
Profit before tax down 48% to ZAR 251 million. Tax expense at ZAR 69 million. No surprises on the tax rate. Attributable profit ZAR 182 million down 49%. We have our EPS at ZAR 4.72 or 472 cents per share. We have headline earnings per share at 409 cents. The main difference there being a profit on disposal of property, which I will touch on later. Breaking down the group revenue and operating profit into first half, second half profile going back to 2014. In 2014, you can see there is a consistent improvement in the group revenue. In the more stable environments, you can see the first half, second half splits, a stronger first half versus a slightly softer second half. You can see the profile of the volatile operating profit for reasons Gary has unpacked.
The feed input cost, recovering costs from the market in the poultry division. I have got some more detail on that, which I can explain as well. The red dotted line shows the operating profit margin. Yeah, again, just to remind you, we are aiming at roughly an 8% margin. Not that we ever hit that exactly. You can see the good profits we made in 2018. If you unpack the driving factors behind that, it was again big movements in the maize price, good recovery on the poultry selling prices. It will be evident in the next slide as well. In 2023, we had the load shedding and the bird flu impacting the group heavily. We had a good recovery period in the last financial year and a slightly depressed first half to this current year.
Yeah, we've got the half-yearly performances for the group broken down into the two segments. You can see the consistent performance from the feed division depicted in the gold bars, which shows the average. We always say that it's a banker. We've got a very consistent performance from our feed division. It's a well-run business. We have included the red and the green lines, the green line being the change in the feed price and the red line being the change in the poultry selling price or the broiler selling price. Here you can clearly see where the selling prices increase and the feed prices decrease. You can see how that opens up the margin for the poultry division. The converse is also true where you see in 2023, the opposite happened. You got feed prices increasing, selling prices decreasing, and that impacting the poultry division heavily.
What we see in this half year is feed prices increasing, selling prices not being able to recover. You can clearly see the impact that it has on the poultry division. On the balance sheet, I'm going to start third line from the bottom, the net assets, and a reduction of 5% to ZAR 4.479 billion invested in the balance sheet or productive assets in use or invested capital. That movement is broken down as a very slight movement in our non-current assets, basically our depreciation versus our CapEx program. On the next slide, I'll show you how we're basically treading water on our CapEx program for the first half. That will obviously flow through into the second half activity, which I will unpack very briefly. We've got the right of use assets and right of use liabilities.
Here on this line, you can see both of them moving up by 54%. That, as I said, is the capitalization of the right of use asset, which in the previous presentation was also profiled as a capital commitment. That one coming through on those two lines. Sorry for jumping around a little bit, but the flow of the logic here is that we have an 8% increase in our non-current liabilities. That mainly relates to the utilization of our tax loss coming out of 2023. As we claw that back, our deferred tax liability rather again. The main movement is our working capital. We have the overall working capital movement down 8% from ZAR 2.286 billion to ZAR 2.1 billion. That is from September to March in the six months.
This includes the core working capital and the peripheral working capital. Let me unpack that for you in the next slide. Capital expenditure slide, the profile for the full year we're comparing against here. You can see what the full year comparison was in the prior year, ZAR 321 million of depreciation and amortization. We're tracking well. We are on ZAR 159 million at the half-year point this year. Total CapEx last year, we spent ZAR 275 million. This year, we've capitalized up to the half-year point, ZAR 109 million. On the cash flow side, you can see there's a build-up of activities because we've already paid deposits of a further just over ZAR 20 million increase in that number coming in at a cash flow of ZAR 132 million, which I'll also show later.
Outstanding commitments at this stage, healthy at ZAR 157 million, showing the pipeline of capital expenditure and activities that we are building out. The main activities that we're spending money on up to date is de-risking farms in the run-up to the winter season, as well as also starting to spend money on making sure the refrigeration capacity in our Goldi plant in Standerton is up to speed to handle the increased volumes. On the working capital, we've got the core and the peripheral embedded in this slide. The peripheral one is called the other receivables and other payables. I will talk to them separately.
The core working capital is our biological assets, amongst others, increasing by ZAR 130 million, mainly driven by the restocking of the parent stock flocks after the bird flu, as well as the higher feed costs starting to filter into our broilers, our egg bank, and our parent stock flocks. As a result of the strong demand in the poultry industry, in the broiler market, we've seen a reduction in inventory of ZAR 211 million in the poultry division. In the feed division, a further reduction of ZAR 91 million. That is despite higher input costs. The inventory levels in the feed division also very well managed. Trade receivables increased by ZAR 81 million. That is a healthy growth. All of that cash already in the bank account, I can count on my one hand the delinquent debtors that we've got in the group. It's exceptionally small.
It's an extremely healthy debtors book. Advanced CapEx payments, you can see the change from full year to half year, ZAR 23 million increase in the deposits paid. You can also see the trade payables line, which is also part of the core working capital, showing the increased volume as we're going through, as well as the increased pricing levels growing at ZAR 347 million. I can confirm that there's been no change in the terms on our credited profile. It is merely reflecting price and increased volumes. On the other receivables and other payables, you can see the movements there. On the net, including both core and peripheral, we've got a movement of ZAR 184 million. Let me show that in the cash flow graph.
The peripheral working capital is reflected in the operating profit, and the core working capital is reflected as working capital changes on the cash flow statement. We started the year with ZAR 13 million cash in the bank net. We closed off with ZAR 259 million cash. Here is the profile. We generated, albeit at a depressed level of profitability, ZAR 224 million cash from our operating activities. We released ZAR 410 million cash out of the balance sheet, out of working capital. We had ZAR 57 million proceeds from the sale of farms. If I take you back to what we reported on six months ago, we had a large capital commitment whereby we were going to develop GGP or great grandparent farms. We entered into agreement with our genetic supplier whereby they will take on that commitment and develop those farms.
We actually transferred those farms to them. We have a ZAR 57 million proceed on the sale of that land. That is also the main reason why we have the difference between EPS and HEPS, where there was a profit embedded in that number of ZAR 32 million. We paid tax of ZAR 57 million. We have capital expenditure cash flow profile of ZAR 132 million, which includes the deposits paid, as if we refer back to the previous working capital slide. We have the dividends paid, which was the resumption of dividends at the end of the previous financial year at a two-times cover for the second half earnings, amounting to ZAR 202 million net cash outflow. We have finance expenses, finance leases, and other items.
have also included the more detailed cash flow statement in the booklet that was published yesterday, as well as a slide in the annexes that unpack the full cash flow. Here is a net of ZAR 54 million outflow, which is mainly the lease payments, leaving us with ZAR 259 million cash on the balance sheet. Maybe just before I step completely off the cash flow statement, we are in a state to drive to rebuild the balance sheet, is what we said last year after the load shedding and the bird flu era. The main measure for us is to increase our cash reserves as a measure of a contingency balance on the balance sheet to make sure that we fund our day-to-day as well as cover for risks. We are well progressed towards roughly that ZAR 500 million target that we are aiming at.
In summary, revenue up 3.5% to ZAR 10.7 billion. Operating profit ZAR 271 million reflecting the pressure from the poultry division, down 51%. Capital expenditure cash paid to date for the six months, ZAR 132 million. We have a cash improved position to ZAR 259 million. That allowed us to declare the dividend of ZAR 220, which is in line with the 2x stated cover. Thank you. I'll hand back to Gary.
On the outlook, as you're aware, and typically we cover the near-term prospects for the business, try and balance it a bit with some negative prospects, what's out there that we should be aware of on the negative front. What are the positive prospects? I think on the negative side, I mean, bird flu is one of those risks that remains. It won't disappear as long as there isn't either vaccination or compensation.
As you know, the industry is fighting the front on both of those. There are matters before the courts on compensation, which the Animal Disease Act allows if you have to cull your livestock as a disease control measure. Vaccination is one of those tools that I think the world globally, everyone is talking about vaccination. This is not a South African problem. It is now a global problem. I mean, Brazil has reported an outbreak in commercial flocks in the Rio Grande do Sul. They produce 15% of the poultry in the country. On Friday, the news came out, bird flu in Brazil. We always wondered if they had it. Now they have admitted it eventually. It is there, but it remains a risk. We are ever vigilant for this. Good biosecurity programs in place, continue with training programs and sensitizing our staff to this.
You know, still a virus, but we'll deal with it. We need to vaccinate breeding stock to protect them from this. This section here deals with pretty much a fairly negative outlook on the local economy. Now, we can take that at face value. Our concern with this, the deteriorating growth prospects, suppressed local investment, spend on infrastructure, and job creation is just that, as you've seen last week, the unemployment levels are increasing. Jobs aren't being created. We have one of the highest unemployment levels in the world. The expanded unemployment rate, 43%, over 43%. This will continue to place pressure on the consumer in South Africa. Disposable income and consumer discretionary spend, certainly under pressure, has been and for the foreseeable future.
There's not a lot that's going to change here in the very near future in terms of creating jobs, particularly as we now concern ourselves with AGOA. I mean, if we lose the preferential trade access as a country under AGOA, that would have further negative consequences for the country. None of us want to see this. We're all part of the South African story, South African Incorporated. We want to see this continue. We truly do hope that the delegation that's in the U.S. this week makes some positive progress towards us. The uncertain landscape that's been created around the trade wars, as various people are fighting with one another around the world and they're shifting alliances, has led to some, or the possibility of a global growth slowdown, but it has led to currency volatility, particularly in emerging markets.
If I stood here just less than five weeks ago, the rand was trading ZAR 2 higher against the dollar at ZAR 19.90. Today, ZAR 18. There's, we've got to buy maize somewhere in there. SAFEX takes a proxy of Chicago pricing. So even if that Chicago pricing stays flat, the rand will influence our markets. Somewhere you have to take a maize position. That creates some challenges, but something that we're not unused to. We've managed in this environment for quite some time. This is the, you know, if we continue down this road, we're very sensitive to the plight of the consumer. We understand that. Selling prices have been under pressure. For sustainable business and creating jobs and reinvesting locally, we have to. Government will have to do their part here and improve the environment within which business can thrive.
We must do our part and invest in local capacity and job creation. What is on the positive front? Enough negativity. There is a good prospect for the local maize crop. I think that has been well covered earlier on, which is expected to increase supplies. Typically, you know, discussions with the trade out there do not see a crop significantly lower than 15 million tons. Good crop. We are a bit behind in the harvesting with the late rains, but it is picking up momentum. That is poised to benefit poultry feed input costs. That will be the second half compared to the first half of this year. Poultry or maize prices are still higher at this point in time than they were in the second half of 2024.
If you compare this coming six months, the second half to the first half of our financial year, certainly an opportunity to improve feeding input costs given the soy pricing levels that we're seeing as well on that graph. Probably more benefit coming from soy meal on the back of the global market for soy meal than in maize. Certainly some opportunity in maize. We have lower poultry finished stock levels. Very comfortable. That should go some way to supporting some recovery in the selling price. We can't continue selling chicken at a loss. I don't think anyone would expect that of us as a business, certainly as a poultry producer after months of price deflation. There was certainly an enormous effort from our sales team in constant conversation with the market to move selling prices. Always cognizant that the consumer is also under severe pressure.
We have to, with inflation in the country, we have to do this. It's our job. We have to get prices up. It's not our job or task to sell chicken at a loss. Higher broiler placement numbers. In December, we made a decision to start increasing our production of broilers. Pleased to say that on the 7th of March, we were now slaughtering 5.8 million birds a week. By 1 July, there will be 5.9 million broilers a week. Getting very close to that 6 million mark that we were slaughtering in November 2022. That comes with the prospect of then being able to sell or increase volumes. Cognizant that we are going into winter, which is typically a slower period for chicken in the country. To date, still seeing fairly healthy demand for chicken, for frozen chicken and fresh chicken.
Project 3R, this was the program implemented last year under Chris's tenure with the team to reset, refocus, restart the business after 2023. That certainly went a long way last year to turning around the fortunes of the company. It remains a focused approach. We have to continuously do this. Keep resetting, refocusing. We had a strategic planning workshop with our board in February of this year. Our status strategy hasn't changed. Astral will be the leading best cost poultry producer. If you're not that, that part we have to look after. That's our job. Things under our control there, we must look after. You have to start right and then look at the selling price. You can't fix inefficiencies in the business with the selling price of chicken.
It certainly remains a focused approach and not something that Theresa and myself and the executive team will diverge away from. There are quite a number of exciting projects to support this going forward. I can promise you, Chair, we definitely will not have time to be bored for the next few years if you look at the opportunities that exist. I mean, I think one needs to continuously evolve with the environment and to improve efficiencies and the cost base in the company is critical. Our balance sheet remains healthy. Theresa has covered this extensively. There is continued focus on increasing cash reserves. Not taking our eye off this ball. Proven capital allocation. Keep our working capital intact and manage the bank balance. There is the prospect of improving this.
I mean, the cash we sit on today is after we paid the dividends that were declared in November and various other admin costs that went through the books in December. So cash balance healthy. With that, I'd like to thank you all for your participation, those that are here in the audience today and those that are listening online. Thank you very much for your time, attendance. We've got a little bit of time for some questions- and- answers. Thank you. Thanks. Shane.
What's the market share inside of the broiler industry? And how much of the total loss kind of bird do you steam to and how much do you supply to third parties? There was talk of one of your competitors changing from the Cobb bird to the Ross bird. Can you just explain those dynamics?
Sure, Shane.
About 60-40, Ross market share, slightly higher in fact. Then probably evenly split internally in the external market for the Ross bird. There was some additional volumes. We sold to one of the producers out there that switched from the Cobb to the Ross bird. Another producer has also taken on the Cobb genetics lately or recently and is slowly decreasing the placements of the Ross genetics and increasing the Cobb. If you look at that, probably still even there, although we gained a new customer for us, but then one of the other producers decided to place Cobb grandparent stock and have moved ahead with the breeding program there. Cobb was looking for new traction in South Africa, new distributor, and they found that with another producer.
All things being equal, Ross has continued to increase sales volumes with the growth in the industry, has gained good market share over the year. The bird is performing very well against the competitive breeds.
Thank you.
Shaul, I think you had your hand up.
Yeah, thanks, Gary. Maybe can you just talk us through, obviously, a lot happening at Daybreak at the moment. From what I gather, it is pretty much floundering. The 1.2 million birds per week is obviously up for grabs. From what I'm gathering, you've picked up some nice share there. From what you've said now, you're going to 5.9 million birds per week. I think the nameplate capacity is 6.2, I think, with a bit of CapEx.
Maybe just talk us through your profile from here and maybe given what's happening with the competitors, whether that 6.2 can come kind of sooner rather than later maybe.
Thanks, Shaul. I think first and foremost, the decision to increase placements in December was not taken with the view over the other producer in mind. I mean, we had at the time had very strong sales, a pull on IQF. Our sales out of stock had been good. Our stock levels were comfortable. There was a proxy for us. We met all our commitments to the retail sector, but it was a proxy for us to start looking at increasing our own supply given the well-balanced supply, Astral supply demand dynamic. That was the first point. What has transpired the last few months is, of course, the unfortunate story playing out that you see in the press.
I think for us as an industry, we must be concerned about job losses. We must concern ourselves with bird welfare. I mean, our first and foremost priority is to look after our livestock. Without our livestock, we do not have a business. Very unfortunate what is playing out there. The demand in the market has not disappeared. The demand is there. We are in a good position to be able to satisfy some of that demand with the vacuum that led from the lower numbers. We do not always know what other producers are slaughtering. Certainly, we only know what you either read in the press and what we gather from some of the market intelligence we have. The broiler production numbers within Daybreak have been very variable, up and down. Just lately, though, you have seen the crisis on their farms.
That will lead to further vacuum in their processing. I think, Shaul, we've positioned ourselves and quite a, you know, probably not, not for any reason in December, you know, we didn't look and say, okay, well, there's a producer that's floundering out there. Let's go and increase volumes. I mean, we made an educated decision about how do we drive revenue growth going forward and we have this capacity. You have to fill it up. Before you look at anything, you have to get the capacity and volume through your own business. Obviously, requiring a market to sell it in. It's no good you produce it and put in a freezer. There were some good indications to us that the market was short supplied. That was also because our stock levels were quite substantially lower at the time. We've increased volumes.
We can push it to 6 million birds a week. As you said, a little bit of CapEx. We're busy with a couple of refrigeration projects which will assist volumes. It'll probably allow us by the end of the year to bring in an additional shift if we have to in Goldi. Certainly we can exploit that opportunity further if required. What we don't want to do right now with the winter season ahead is run ahead of ourselves and end up building stock again. I don't think that that would be wise. Still looking to balance supply with demand. This is something we do from week- to- week. As I stand here today, our stock levels, in fact, better than they were than we've reported at the end of March.
So comfortable and with our pipeline fairly full, looking to improve sales volumes, but also looking to do that at the right price. We do look to a softer feed price in the second half. A lot of that coming from soy. But inflationary costs are still there. We need to cover those. I hope that answers the question, Shaul.
Hi. Good day, thanks. I think you touched on it a bit in there regarding the Brazil avian flu. Obviously, vaccinations pose their own challenge, but are there any other precautions that can be taken regarding that specifically? What if something happens to come across? Any guidance on the risk there and precautions?
Absolutely. I think our Department of Agriculture, our government, have been very good in quickly shutting down supply from countries that pose a risk.
Pose a risk with chicken products coming to South Africa that could infect our local livestock, poultry livestock. I know that at the moment, they're looking at this. There is some talk about regionalization, and this is not new. I mean, it's happened with the U.S. as well. Although the U.S. have just had such a wide number of states impacted or infected with bird flu, that there's very few states left in North America that actually export chicken here. If they go and look at regionalization, it means they will look at approved compartments from which chicken can be exported. I do believe that initially, they, like others, will probably follow and close our borders to imports for the moment. I think we have to look at it in context.
As I said earlier, 60% of that is MDM that goes into further processed meats in the country, and particularly polony. There's 5% of that that is frozen bone-in portions. About 20% is tertiary products, offal, some miler, and various other tertiary products, which we produce enough of in the country. As an industry cyper, I think we're comfortable that we can take up those volumes if they close the border tomorrow to Brazilian imports, which they should do because history has shown that our regulators have reacted very quickly to preventing any risk to our local industry. We can take up those volumes. If there's a long-term wholesale closure of the Brazilian exports, the question has been posed by a couple of commentators, and Shane earlier asked, if there's a buildup of stock in the country, what then happens? That becomes a risk.
Somewhere there, if the market's open or the border's open, they're going to go and look for somewhere to place it. Fortunately, we have an anti-dumping duty in place, which we did not have before. The tariff framework that we have in the country, we can only hope that that protects the industry if that's an eventuality. Now, there are a lot of things that must play out. I mean, the Brazilians obviously are reacting very quickly to this. They will have to. They are the largest exporter of chicken around the world. China have closed their market, so you can imagine they'll be scrambling now to look at ways of being able to open their exports. Marlize, are there any online?
No, you've answered the online question as well. Okay. No further questions.
Thank you. Anything else? Do we have time, Marlize? No.
Certainly, you're welcome if there's any other questions to follow up with the management team at any point. I hope we've covered it well. There are some green shoots out there, so not all negative. Thank you for your time and your continued interest, and we value the participation. Thank you very much.