Quantum Foods H1 revenue down 12.8%

Quantum Foods, a leading South African animal feed and poultry business, faced challenges in its fiscal first half, leading to a 12.8% decrease in revenue. Despite showing signs of improved profitability, the company decided to skip paying a dividend. Adel Deidre Van Der Merwe, the CEO of Quantum Foods, shed light on the factors affecting their decision and the outlook for the company. The key theme of the interview revolved around the risks posed by Avian Influenza outbreaks, capital expenditures, vaccination issues, and the performance of the company's business segments across different African countries. The CEO highlighted the impact of the AI outbreaks in 2023 and 2024, resulting in a biological loss of 37 million during the reporting period. As the company focuses on recovery plans and prepares to expand its operations, the decision not to declare an interim dividend was influenced by the need for increased cash flow and potential risks in the upcoming months. Quantum Foods is set to commence construction of its Malmö' pre-feed mill, indicating a substantial capital requirement for the remainder of the year. While uncertainties remain, Van Der Merwe emphasized that the future is not all doom and gloom but rather characterized by risk and higher cash flow demands. The discussion also delved into the politics surrounding vaccine approval and the company's business performance in regions like Uganda, Mozambique, and Zambia. Van Der Merwe expressed optimism regarding the favorable trading conditions in Uganda and Mozambique due to the impact of supply dynamics from South Africa. Additionally, the CEO provided insights into the challenges faced in Zambia, such as high raw material prices attributed to maize shortages and drought conditions. Despite the prevailing obstacles, Quantum Foods anticipates enduring the tough market conditions and leveraging opportunities in its egg business. Van Der Merwe emphasized the importance of strategic planning and recovery initiatives to support the growth of the company's layer farms, paving the way for improved volumes and pricing in the coming months. The CEO's positive outlook on the egg business signals a shift towards recovery and growth, aligning with the company's long-term strategy to capitalize on market trends and consumer preferences. The interview concluded on a light-hearted note with a mention of the nutritional benefits of eggs and the CEO's encouragement to incorporate them into daily dietary habits, reflecting Quantum Foods' commitment to providing essential and wholesome products to consumers.