Quantum Foods Holdings, Ltd., a major egg producer in the Republic of South Africa, posted a substantial loss for the first half of Fiscal 2023 ending March 31st. The company operates egg production units, feed mills, broilers and farming enterprises.
For the period, the company posted revenue of $181.6 million ($148.8 million 1H FY 2022). With a loss for the period of $6.2 million compared to a loss of $0.3 million for the 1H FY 2022.
The company generated a gross margin of 17.2 percent, close to the 17.5 percent in the corresponding first half of FY 2022. Operating margin declined to 0.4 percent from 1.2 percent. Profit margin was negative 3.4 percent compared to 0.2 percent.
The Egg Segment of the company attained revenue of $35.3 million (19 percent of total sales) with a loss of $4.1 million.
Management ascribed the loss to a 30 percent increase in the cost of feed, the impact of power brown-outs and the need to generate electrical power on farms and plants. The company experienced an outbreak of HPAI resulting in the depletion of 470,000 hens in a western Cape operation during April, contributing to a loss that will be reflected in the second half of FY 2023 together with additional losses from avian influenza during the current period.
As of the end of September, 5 million hens represnting 18.5 percent of the RSA laying population of 27 million pre- HPAI have been culled. Losses are spread among the provinces of Gauteng, Western Cape, Kwa-Zulu-Natal land Limpopo Provinces leading to shortages and rationing at the retail level.