RCL Foods achieves higher half-year profit on unit performance

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The South African agri-food producer RCL Foods reported on Monday February 28 a 21.6% increase in its half-year profit, boosted by the good performance of all of its activities.

RCL, which makes Selati sugar, Ouma rusks and Rainbow Chickens brands, reported earnings per share (Heps) of 72.7 cents for the six months to December, down from 59.7 cents last year.

Underlying HEPS, which excludes exceptional items and accounting adjustments, rose 3.1%. The company declared an interim dividend of 15 cents per share.

Revenue increased by 9.2% to R17.1 billion, mainly due to improved chicken volumes and prices, improved grocery prices and higher revenue from Vector Logistics. Earnings before interest, tax, depreciation and amortization improved from R162.7 million to R1.3 billion.

RCL said its food division, which includes the grocery, bakery and sugar business units, had resilient underlying performance, with demand in most categories remaining relatively strong despite implementing price increases. selective pricing to offset increasing raw material cost pressure.

Rising costs of raw materials, energy, transport and labor

Consumer goods companies are grappling with soaring costs for raw materials, energy, transportation and labor. RCL is particularly exposed due to its reliance on food – where inflation is particularly high.

Supported by strong marketing campaigns, its chicken brands Simply Chicken and Rainbow continued to deliver double-digit volume growth in the chilled processed meats category.

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