S.Africa’s Quantum Foods swings to loss on bird flu, power cuts

(Reuters) – South African poultry producer Quantum Foods on Friday reported a 35 million rand ($1.86 million) loss in the year to end-September, after the country’s worst bird flu outbreak decimated its chicken flock and power cuts intensified.

The prior year the company posted a 37 million rand 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, which resulted in the culling of about a third of its national flock.

Although the government has said the outbreak was now under control, poultry producers such as Quantum, RCL Foods and Astral Foods have suffered huge losses at a time the industry is facing higher costs due to South Africa’s electricity crisis.

South Africa is experiencing daily electricity cuts 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 155 million rand during the financial year due to the bird flu outbreak. It also 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 temperature and ensure the flow of air, water and feed, said it spent 52 million rand on diesel to run generators as power cuts intensified during the year.

Quantum also invested a further 35 million rand to purchase generators.

($1 = 18.8350 rand)

(Reporting by Nelson Banya; Editing by Sharon Singleton)