RFG re­ports a healthy 7.6% in­crease in turnover in five months

Pretoria News - - NEWS - SANDILE MCHUNU [email protected]

RHODES Food Group (RFG) yes­ter­day re­ported a 7.6 per­cent in­crease in turnover for the five months to end February, boosted by the performanc­e from its re­gional seg­ment, which in­cludes South Africa and the rest of Africa.

The group said over­all re­gional seg­ment turnover in­creased 9.3 per­cent, with re­gional fresh foods in­creas­ing 15.9 per­cent while vol­umes rose 3.5 per­cent and achieved an ac­quis­i­tive growth of 4.3 per­cent.

It said the performanc­e in re­gional fresh foods was driven by the strong growth in the ready meals and pie cat­e­gories.

“Re­gional long-life turnover in­creased by 5.7 per­cent with vol­ume growth of 3.2 per­cent while fruit juices and baked beans con­tinue to per­form well,” the group said.

How­ever, the group said the op­er­at­ing mar­gin for the re­gional seg­ment im­proved dur­ing the pe­riod, but at a slower rate than ex­pected.

The group also ex­pe­ri­enced a strong trad­ing for March across all cat­e­gories and there has been an up­lift in canned food vol­umes, par­tic­u­larly veg­etable and meat prod­ucts, fol­low­ing the na­tional state of dis­as­ter be­ing de­clared in the coun­try.

Rhodes Food brands in­clude Rhodes, Bull Brand, Squish, Mag­pie, Ma Baker, Pakco, Hinds, South­ern Coat­ing and Bisto.

The group said its in­ter­na­tional turnover de­clined 1.7 per­cent dur­ing the pe­riod, mainly to a marked slow­down in ex­ports of canned fruit to China since Jan­uary fol­low­ing the out­break of Covid-19.

“Lim­ited ex­ports have been made to China since Jan­uary which has re­sulted in a de­cline of 11.3 per­cent in in­ter­na­tional vol­umes,” the group said.

“The im­pact of this re­duc­tion in ex­port vol­umes was par­tially off­set by in­fla­tion of 6 per­cent and the 3.6 per­cent de­pre­ci­a­tion of the rand against the bas­ket of trad­ing currencies.”

Rhodes Foods said while some of the ex­cess vol­ume of canned fruit ear­marked for China was ex­ported to other Asian mar­kets, a sig­nif­i­cant vol­ume would be placed in al­ter­na­tive mar­kets at lower mar­gins than those typ­i­cally achieved in China.

The group said that it ex­pected the re­cent de­val­u­a­tion of the rand to have a favourable im­pact on the sec­ond half performanc­e, but warned that prof­itabil­ity in the first half would be ad­versely af­fected by the mark-to-mar­ket reval­u­a­tion of for­ward ex­change con­tracts at the end of March.

It said in­ter­est pay­ments for the six months to end March were now pro­jected at R5 mil­lion lower com­pared to last year as a re­sult of re­duced debt lev­els.

The group also said the Covid19 out­break has not im­pacted any of its man­u­fac­tur­ing fa­cil­i­ties and pre­cau­tion­ary measures have been im­ple­mented for staff, con­trac­tors and vis­i­tors across the group’s op­er­a­tions to re­duce the risks as­so­ci­ated with the virus.

The group will re­lease its in­terim re­sults in May.

Rhodes Food shares de­clined 4.09 per­cent on the JSE yes­ter­day to close at R11.50.

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