AST Group plc, a Malta-headquartered animal feed trading and shipping group, recorded a pre-tax loss of €2.1 million during 2023 (2022: €520,451 pre-tax profit) as it faced a number of logistical and operational challenges.
AST Group carries out end-to-end supply chain management, from sourcing raw materials for animal feed to the delivery of said animal feed to producers. Its income streams are split into the trading of animal feed products and the chartering of vessels for own use or third parties.
The results were announced in AST Group’s Annual Report for the year ended 31st December 2023, released recently.
During the year in review, the group’s revenue dropped sharply from 2022’s €45 million to €28 million, as it experienced decreases in income from both the sale of animal feed and freight services.
AST Group stated that over the course of 2023, it expanded operations through the acquisition of two vessels, namely MV AST Rising and MV AST ECO, financed through an €8.5 million bond issue. While this is a notable move, when combined with ongoing geopolitical conflicts in the Middle East, the group encountered a number of transportation, logistical and operational issues. The efforts to acquire, upgrade, and integrate the new vessels within the group’s operations led to an added expense being incurred. The vessel revaluation prompted by these upgrades will be accounted for in financial year 2024.
Additionally, AST Group said that since the vessels acquired were positioned in China and South Korea, “it took a significant amount of time and money to bring them to the Mediterranean region,” thus resulting in them being non-operational for some time, impacting revenue and profitability. Similarly, another one of its vessels, MV AST Malta, was due for a special survey which led to it not being operational for a month.
As at the time of the release of the report, all vessels are in operation in the Mediterranean and have been integrated in the group’s operations. This has prompted management to be confident that it will return to profitability in 2024.
Cost of sales for 2023 amounted to €28.7 million, a sharp 34 per cent drop from the €43.5 million recorded in 2022. Selling and distribution expenses totalled €127,090 (2022: €206,427), while administrative expenses came in at €853,746 (2022: €724,562).
The addition of the two new vessels drove total assets to expand substantially to €15.3 million, up by 61.2 per cent from the €9.5 million reported at the end of 2022.
AST Group’s accumulated losses at the end of 2023 amounted to €2 million (2022: €18,068). As a result, the Board of Directors did not recommend the distribution of a dividend and proposed to charge the loss for the year to reserves.
Looking ahead, the Board of Directors stated that the group intends to continue operating “in line with the current business plan.”
