By Nqobile Dludla
JOHANNESBURG (Reuters) – South African food producer RCL Foods reported a 38.8% rise in half-year earnings on Monday and declared its first interim dividend in two years, sending its shares up more than 8%.
The company, whose brands include Selati sugar and Sunbake bread, had been completing a portfolio review that included selling its frozen food business Vector Logistics and spinning off and listing its Rainbow Chicken poultry unit.
During that review, and while grappling with depressed consumer demand, it withheld paying dividends, with the last interim dividend declared for the six months to December 2021, which it paid in 2022.
With the processes concluded, the board declared an interim dividend of 20 South African cents per share for the six months ended December 2024.
RCL said its headline earnings per share from continuing operations rose to 109.4 South African cents in the period.
Its earnings before interest, taxes, depreciation, amortisation and impairments (EBITDA) jumped 25.1% to 1.5 billion rand ($80.5 million), supported by cost savings and production efficiencies.
RCL said it has begun to see some welcome price relief in certain commodities such as wheat, contributing to improved margins in its groceries and baking businesses, though prices remain elevated.
Group revenue rose 5.4% to 13.6 billion rand.
With the portfolio review now complete, Chief Financial Officer Rob Field told Reuters the group is quite settled with the remaining portfolio, but did not rule out further acquisitions.
“We’re very clear going forward that if opportunities present themselves in the branded food space, we’re going to look closely at that because that’s the closest to a strategic fit and what we believe we can add the most value to,” Field said.
RCL will no longer be chasing any commodity type businesses, Field added.
($1 = 18.6279 rand)
(Reporting by Nqobile Dludla; Editing by Jamie Freed, Varun H K and Jan Harvey)
