Report
Victor Dima
EUR 22.16 For Business Accounts Only

Astral Foods (Hold, TP ZAR 134/share) - Eskom power cuts to affect poultry operations in largest plant

·  Astral has its biggest processing plant, Goldi (1.9m broiler/week processing capacity i.e. 37% of the group total 5.2m broiler/week capacity) and Meadow Feed mill (capacity of 480k tons/year feed, c.35% of total capacity) in the Standerton region. Eskom may disconnect electricity supply to Lekwa Local Municipality (Standerton, Mpumalanga) commencing on 23 January 2017 if outstanding payments are not received.

·  The scheduled disconnection times may interrupt Astral’s feed and poultry operations with further risk of full power disconnection on a 15 day notice if debt situation is not addressed.  We note that Astral itself is not in arrears on any payments and is a fully paid-up client with the municipality.

·   Astral feeds 11.5m chickens on a daily basis in the region and the electricity supply issue may lead to large scale euthanasia of the birds.


Provider
Arqaam Capital
Arqaam Capital

Established in 2007, Arqaam Capital is a specialist emerging markets investment bank, bringing regional and international product offerings to the emerging markets. Arqaam Capital combines international best practice with expertise in the markets in which we operate. Our primary role is to provide financial intermediation and create investment opportunities for frontier and emerging markets investors looking to invest in their own markets and abroad, as well as international investors seeking opportunities in target frontier and emerging markets. Arqaam Capital is headquartered in the Dubai International Financial Centre (DIFC), with additional offices in Libya, Lebanon, Egypt, and South Africa. 

Arqaam Capital's research platform provides the largest coverage footprint of MENA equities and one of the largest on the African continent with a total of 300 stocks under coverage. Arqaam Capital is ranked as one of the leading research providers in the region - a reflection of its broad coverage universe, its in-depth and high quality research, as well the compelling investment ideas that the team generates. The analysts closely analyze their sectors and issue in-depth company and sector research while the strategy team connects the micro with the macro, focusing on index analysis, macroeconomics and strategy research. 

Analysts
Victor Dima

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