Posted on

RCL FOODS – FINAL RESULTS JUNE 2014

Revenue from continuing operations jumped to R19.7 billion (R10.1 billion). Operating profit shot up to R534.0 million (R167.1 million). Loss attributable to equity holders was R289.0 million (profit of R27.2 million). Furthermore, headline loss per share from continuing operations were 47.7 cents per share (earnings of 4.8 cents per share).

Dividend
The directors have resolved to declare a final gross cash dividend (number 79) of 20 cents per share for the period ended 30 June 2014 (nil). No interim dividend was declared and paid in either the 2014 or 2013 financial year. Declaration of a dividend for 2014 signals the board”s intention to resume paying dividends, subject to the

Prospects
The weak state of the South African economy, expectations of rising interest rates, escalating and prolonged labour strikes and the significant devaluation of the local currency means a sustainable improvement in consumer spending is unlikely in the near future. The impact of this is pervasive across all RCL Foods” segments.

The poultry industry remains in crisis and the effectiveness of the recently announced anti-dumping protection will be key to the survival of the industry. Market prices of maize and soya meal have declined recently and are likely to translate into a lower feed cost if sustained at current levels.

With the current favourable level of irrigation resources and the carryover of cane due to the industry strike, a good production season is expected for TSB. The lower level of sugar imports since the promulgation of the new tariff promises a normalisation in the SACU sugar market and better marketing conditions are expected.

The redemption of Foodcorp”s Euro denominated debt has removed the significant foreign currency valuation volatility and allowed a more appropriate funding structure to be implemented, which will result in a more stable and lower cost of funding going forward.

The Group continues to explore opportunities in strategic growth markets in the food sector in South Africa and sub-Saharan Africa in line with its long-term aspirations.