JOHANNESBURG (Reuters) -South Africa’s RFG Holdings, reported a 20.4% rise in half-year earnings on Wednesday, as the food producer hiked prices to recover higher input costs.
Consumer goods producers globally have raised prices to cope with surging costs for almost all raw materials, energy and packaging after Russia’s invasion of Ukraine compounded pandemic-related supply chain logjams.
The manufacturer, which owns the Rhodes brand of canned fruits and juices, said diluted headline earnings per share, one of the main profit measures in South Africa, rose to 99.8 cents in local currency in the six months that ended March 31, up from 82.9 cents a year ago.
Group operating profit rose by 15.2% to 399 million rand ($22.05 million) as the operating profit margin improved by 100 basis points to 10.2%, exceeding the group’s medium-term target, it said.
RFG’s revenue increased by 3.2% to 3.9 billion rand, with sales volumes declining in the constrained consumer spending environment. Revenue growth was mainly driven by price inflation of 6.9%, the food producer said.
“It is pleasing that despite the pressure on sales volumes, the group improved its profitability by focusing on revenue management, recovering inflationary cost increases and maximising operating efficiencies,” CEO Pieter Hanekom said in a statement.
Regional revenue, covering South Africa and the rest of Africa, rose by 5.8%, boosted by good growth in fruit juice, meat products and dry foods.
International revenue, which accounts for 16% of the group’s total revenue, fell by 8.6% due to softer international pricing and lower export volumes, which was compounded by shipping and logistics challenges at the Cape Town port.
On the outlook for the second half of its financial year, Hanekom said: “Our major focus will be on volume recovery … and to reduce the backlog of export shipments caused by port delays.”
($1 = 18.0735 rand)
(Reporting by Sfundo Parakozov; Editing by Nqobile Dludla and Jamie Freed)
