Innscor counts avian flu losses

INNSCOR Africa (Innscor) says volumes at Irvine’s were severely impacted by the effects of the highly pathogenic avian influenza (avian flu) epidemic which occurred at the end of the last financial year. 
Between May and August last year, avian flu hit the region, killing more than one million chickens in South Africa (SA) and Zimbabwe.
“Table egg volumes were 47 percent below those recorded in the comparative year, whilst day old chick sales were 10 percent down over the same period,” Addington Chinake, Innscor’s chairman said in a comment accompanying the group’s financials for the year ended June 30, 2018.
Chinake said improvements in other business lines, however, made up for the losses from the epidemic.
“…this part of the business has been augmented by the importation of hatching eggs during the second part of the financial year. Frozen chicken volumes increased marginally, with all available raw materials being diverted into this particular line in an effort to keep supply to the consumer open,” he said.
He said the group implemented a strict overhead control programme whilst the operation has been in the re-stocking phase.
“…and this allowed for a small increase in operating profit to be recorded over the prior year,” Chinake said.
The group says overall revenues from the line were subsequently similar to that recorded in the prior year.
“In mitigation of future outbreaks, further bio-security controls have been added to the stringent control environment already in place at the operation. In addition, the operation has invested in the only Polymerase Chain Reaction (PCR) laboratory in Zimbabwe. This facility enables highly accurate, on-site testing for, and immediate elimination of any infected birds in the event of a future outbreak,” Chinake said.
The group says the re-stocking of the breeder flocks is now largely complete, it expects a gradual improvement in the volume of table eggs going forward, whilst local production of day old chicks will also now “gradually improve and be fully restored by the end of March 2019”.
“Importations of day old chicks will need to continue until full capacity is restored however, and we will work with the authorities to ensure that the necessary importation permits, foreign currency and duty exemptions are granted to ensure the day old chick and frozen chicken markets are fully supplied in the interim,” Chinake said.
Overall, the group posted revenues of $631 million in the year under review, representing a nine percent increase on the comparative year.
The group attributes the performance improvements to “increased volumes across most categories and improved product mix”.
Profit after tax was up by 40 percent to $48,7 million from $34,7 million in the previous comparable period.
In 2017, the avian flu outbreak was also confirmed in the Democratic Republic of Congo (DRC) and SA.
In DRC, about 32 000 birds were reportedly killed by the deadly virus, while 813 000 were affected in SA. In Zimbabwe, the disease killed 857 000 breeding stock chickens, while around two million eggs had to be destroyed.
Egg production losses in the three countries totalled $810 million, causing more than 3 000 job losses.
[email protected]