Quantum Foods swings to loss on bird flu, load-shedding

Poultry producer Quantum Foods on Friday reported a R35m loss in the year to end-September after the country's worst bird flu outbreak decimated its chicken flock and power cuts intensified.

The year before the company posted a R37m profit.

South Africa has battled an outbreak of a high-pathogenic avian influenza (HPAI), a bird flu which spreads rapidly in an infected flock causing a high death rate. It resulted in the culling of about a third of the national flock.

Though the government has said the outbreak was under control, poultry producers such as Quantum, RCL Foods and Astral Foods have suffered huge losses at a time when the industry is facing higher costs due to an electricity crisis.

Daily electricity cuts have been implemented by Eskom as its ageing fleet of coal-fired plants frequently break down.

Quantum said it wrote off assets, such as layer hens and breeding stock, worth R155m during the financial year due to the bird flu outbreak. It had additional costs from feed and eggs that had to be destroyed as part of measures to combat the avian flu.

The egg producer, which requires uninterrupted electricity to maintain ideal poultry housing temperatures and ensure the flow of air, water and feed, said it spent R52m on diesel to run generators as power cuts intensified.

Quantum also invested R35m to purchase generators.

Reuters