Country Bird's earnings up 2% to 24.93c

Group revenue for the year increased to R3.2bn, slightly higher than the R3.1bn last year but its operating profit of R132.6m was 11% lower than the R149.5m in made in 2012.

This sustained level of profitability‚ the group stated‚ was primarily as a result of excellent performances by the other African poultry and feed businesses as well as the South African feed operation.

Operating profit of R64.6m in the other African businesses was an increase of 125% over last year's figure of R28.8m and represented 49% of the group's operating profit for the year.

Expeditious procurement and hedging of raw materials‚ as well as tight operational controls resulted in the South African feed operation reporting an operating profit of R98.1m‚ 62% higher than the previous year's comparative of R60.6m.

With finance costs reducing marginally by 1% to R60.2m, the profit before interest and tax of R73.3m was 18% lower than last year's figure of R88.7m. The attributable tax rate of 21%‚ is positively affected by the lower tax rates applicable in the other African operations and resulted in a 5% reduction in profit after tax to R58.1m compared with R61,1m last year.

Strong performance in other markets

CBH currently operates in Botswana‚ the Democratic Republic of Congo‚ Malawi‚ Mozambique‚ Namibia‚ South Africa‚ Zambia and Zimbabwe.

"The group recorded a credible set of results‚ despite problems facing the poultry industry in South Africa. The performance from the operations outside South Africa has been the best since the formation of the group.

"The rewards for early recognition and subsequent investment in selected countries in the Africa are becoming apparent and these operations together with other selected regional opportunities will continue to be a key component of the groups strategy. As a result of difficult trading conditions in South Africa and substantial increases in raw material prices‚ the working capital requirements and consequent interest charges were high. Despite this the group was able to show an overall positive increase in cash and cash equivalents for the year of R38.7m," CBH said.

Commenting on the local poultry industry‚ the group said it remained under severe pressure and had now officially been designated as a distressed industry. The combination of static volumes with no significant increases in selling prices were insufficient to avoid further margin erosion with the sector recording an operating loss of R24.7m compared with an operating profit of R56.6m in the prior year.

CBH said that the industry continues to suffer from record levels of imports coupled with high raw material input prices and had engaged with the relative government ministries in order to find common ground for relief.

"In an effort to minimise the impact of these hurdles we have continued to make inroads with our market diversification policy. We have recorded growth with the existing quick service restaurant business while making further inroads into growth sectors with new customers‚" CBH said.