To date, the Highly Pathogenic Avian Influenza (HPAI) has wiped out approximately 1.5 million of JSE-listed Quantum Foods’s layer and breeding stock, costing the company R106 million, the poultry producer said on Friday.
Quantum is the latest in the sector to inform investors of the impact the bird flu has had on its operations, further bracing investors for a less-than-pleasing earnings season.
Read: Astral blames load shedding for expected losses
“Shareholders of Quantum Foods are advised that a HPAI outbreak has been detected at several of the company’s farms in Gauteng and the North-West province,” the group said in a trading update.
The news on Friday saw Quantum’s share price plunging briefly in the morning but quickly gaining back its losses and trading over 4% stronger just before midday at R4.49.
According to Quantum, the blow of the latest outbreak has been confined to operations in the northern parts of the country, while operations in the Western Cape and the Eastern Cape province are said to be currently unaffected.
Earlier this year, the group had to fight a bird flu outbreak at its Lemoenkloof layer farm in the Western Cape, affecting about 420 000-layer birds and costing the producer about R34 million.
Read:
Bird flu creeps inland, with virus mutation reported in Mpumalanga
Bird flu costs Quantum Foods R34m and 420 000 chickens
500 000 chickens culled in latest WC bird flu outbreak
Once a bird flu outbreak has been detected, poultry producers are required to slaughter all chickens at the location of the outbreak and at farms within a three-kilometre radius from the centre of the outbreak to contain it and prevent exposure to consumers. All eggs produced must also be destroyed.
Earnings impact
In its latest trading update, Quantum Foods also prepared investors for a massive loss in earnings for the year ending September 2023.
Headline earnings per share (Heps) are expected to be at least 100% or 14.1 cents lower than the 14.1 cents reported last year.
Similarly, earnings per share (EPS) are also expected to decline by at least 100% of the 12 cents reported last period.
Quantum’s update comes just a day after industry peer Astral Foods guided the market through its own expected losses, due largely however to the costs related to load shedding.
On Thursday, Astral informed investors that it expects the group’s load-shedding costs for the financial year to come to as much as R1.9 billion.
Astral also stressed the anticipated impact that the bird flu outbreak may have on egg and poultry meat availability in the market, and push up prices.
Read: Chicken prices do need to increase – RCL CEO
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