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RCL interim results December 2017

Revenue for the interim period decreased to R12.765 billion (2016: R13.085 billion), operating profit before depreciation, amortisation and impairment (EBITDA) increased to R1.201 billion (2016: R900.4 million), operating profit jumped to R810.3 million (2016: R355.5 million), profit for the period attributable to equity holders of the company climbed to R663.4 million (2016: R321.7 million), while headline earnings per share grew to 74.5 cents per share (2016: 47.6 cents per share).


The directors have resolved to declare an interim gross cash dividend (number 86) of 15 cents per share (2017: 10 cents per share).

Company outlook

We are cautiously optimistic that consumer spending has begun to improve, which should allow volumes to continue to recover from a low point. The poultry market continues to stabilise and Chicken is expected to continue its recovery. Groceries is ready to capitalise on the improved environment with a good pipeline of innovations to be rolled out over the next few months. Despite the recent tariff implementation, sugar imports remain a threat due to global surpluses and a strengthening rand. Millbake will continue to place focus on restoring volumes, although tough trading conditions are expected to persist. Animal Feed is expected to continue to benefit from lower commodity input prices and improved volumes as the impact of AI diminishes.

The recent political developments have been positive and provide optimism for growth within the South African economy. Markets have reacted favourably post the December political announcement, with rand strength and falling bond yields reflective of increasing investor confidence. Despite this, concrete plans and economic policies to revitalise our economy are yet to be enacted by government and the extent to which such plans can be implemented and their timeframe remain as uncertainties. We therefore expect the next six months to remain challenging.

Logistics” second half of the current financial year is expected to be an improvement over the corresponding period, which period already included the impact of reduced Chicken volumes. A continued focus on cost rationalisation and maintaining an appropriate cost base, coupled with new business opportunities, will deliver a more positive outlook for the remainder of the year.

We remain confident in our strategy and are making steady progress towards our goal of a diversified food portfolio, focused on adding higher margin, added value products and categories.