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RCL FOODS interim results December 2016

Revenue for the interim period increased to R13.1 billion (2015: R12.9 billion). Operating profit before depreciation, amortisation and impairment (EBITDA) decreased to R900.4 million (2015: R1.2 billion), operating profit lowered to R355.5 million (2015: R761.3 million), while profit for the period attributable to equity holders of the company dropped to R321.7 million (2015: R736.7 million). Furthermore, headline earnings per share dropped at 47.6 cents per share (2015: 86.2 cents per share).



Dividend

The directors have resolved to declare an interim gross cash dividend (number 84) of 10.0 cents per share for the six months ended 31 December 2016 (H1 2016: 15.0 cents).



Prospects

RCL FOODS expects demand, and therefore volumes, to remain constrained. As a result, synergies, overhead savings and production efficiencies will continue to receive substantial focus. The group has a good pipeline of innovations across a number of product categories, designed to drive further market share gains. Within the Sugar business unit, rainfall, industry pricing and import levels remain key drivers of profitability for H2 2017.



The outcome of the chicken industry”s crisis remains uncertain, but the group is satisfied that the South African Government is aware of the enormity of the matter, and the group has taken substantial corrective action to safeguard the business. The Hammarsdale downsizing will impact on the Animal Feed and Logistics business units” second half results.



The group remains confident in its strategy and are making steady progress towards our goal of a diversified portfolio, focused on adding higher margin, added value products and categories. This set of results was characterised by significant external pressures.