Quantum Food Holdings, a leading South African food company, has announced that it expects to report higher annual earnings for the year ending September. The company attributes this increase to improved demand for poultry products and a stronger rand against the dollar. These favourable conditions have contributed to an expected rise in headline earnings per share (HEPS) of between 17% and 29%.
According to Quantum Food Holdings, HEPS for the year to end-September are expected to be between 157.5c and 173.7c. This represents a significant increase from the previous year. Earnings per share (EPS) are also expected to be 16%-28% higher, ranging from 160c to 176.6c. The company has noted that trading conditions during the 2026 financial year were generally favourable.
The favourable trading conditions were supported by higher demand for poultry products, a stronger rand, and lower feed input costs. Additionally, the absence of significant poultry disease outbreaks and low levels of electricity disruption in South Africa contributed to the positive performance. However, higher fuel costs in the second half of the year, associated with the conflict in the Middle East, partially offset these favourable conditions.
Quantum Food Holdings has reported improved earnings from its feeds business. Although feed volumes sold to external customers remained unchanged, slightly lower volumes were required by the internal poultry operations due to improved farming efficiencies. The company noted that earnings in the previous reporting period were negatively impacted by additional costs incurred during the repair of the Malmesbury mill raw material intake area after the June 2024 explosion.
The Malmesbury feed mill expansion project was successfully completed in the first half of the year and contributed positively to efficiency and livestock performance. However, earnings from the broiler farming business were lower due to offsetting factors. The benefit of increased day-old chick volumes and improved live bird volumes was offset by lower margins on contracted live bird sales and higher operating costs.
In contrast, earnings from the layer farming business were significantly higher despite lower volumes of point-of-lay hens sold externally. The company benefited from improved breeding efficiencies, increased volumes of day-old pullets sold, and excellent farming efficiencies on layer farms. Additionally, insurance claim proceeds for losses incurred in the prior period contributed to the improved earnings.
Quantum Food Holdings expects to release its results on November 27. The company's African businesses also reported improved earnings, driven by factors such as reduced feed costs, increased demand for day-old chicks and feed, and improved farming efficiencies. The group’s earnings from Zambia, Mozambique, and Uganda were significantly higher or slightly improved due to various factors.
Key points
- Quantum Food Holdings expects HEPS to rise by 17-29% due to strong poultry demand and a stronger rand.
