RCL Foods, the producers of Rainbow Chicken, have reported a loss of almost R1 billion.
Food producer RCL Foods has reported a loss of R959 million for the year ending June 30, following a tough year exacerbated by the impact of Covid-19 and the national lockdown.
The group, whose brands include Rainbow Chicken, Ouma Rusks, Sunbake bread and Selati sugar, said in its annual results for the fiscal year that a direct cost impact of R266 million associated with the pandemic, coupled with SA’s sovereign ratings downgrade resulted in R1.5 billion in non-cash writedowns, or R1.25 billion post-tax.
RCL shares strengthened by almost 3% in early trade, to R8.73 a share.
The group managed to grow its revenue by 7.4% to R27.8 billion, while operating profit before depreciation, amortisation and impairments (EBITDA) increased to R1.63 billion from R1.52 billion.
RCL said its total food staple basket grew 8.5% while its groceries segment showed growth, led by petfood, peanut butter and rusks. It said its sugar business unit delivered a “significant improvement in profitability, albeit off a low base”.
Its chicken business, meanwhile, was impacted by the closure of quick service restaurants during the first few months of the lockdown. “We remain confident in our plans to restore margins to acceptable levels once the demand curve normalises, and we are hopeful that this will be supported through effective implementation of the Poultry Sector Master Plan which aims to stimulate local demand, boost exports and protect the local industry against dumping through trade measures,” the group said in a statement.
It approved a final divined per share of 10 cents, takng its total dividend per share for the year to 25 cents.