RCL FOODS EXPECT LOWER INTERIM EARNINGS AS IT BATTLES HIGH COSTS, OUTAGES

IN A TRADING statement for the six months ending December 2022, RCL Foods said yesterday that it expected its interim headline earnings per share (Heps) to decline as much as nearly 27% amid challenging market conditions and unprecedented load shedding. The expected decline from the comparative period was largely attributable to Rainbow and the baking business unit, it said. “Challenging market conditions persisted throughout the current period, with sustained high commodity input prices; above-inflationary price increases for other costs, particularly energy and packaging and unprecedented levels of load shedding adding to the cost base, with the latter further impacting production and service levels. “As a result, margins came under pressure, and price increases to recover cost push had to be carefully managed in order to protect volumes,” RCL said. Heps for the six months to December 2022 were likely to decline to between 26.8% and 20.1%, or 53.2 cents and 58.1c, from 72.7c the prior comparative period. Earnings per share were forecast to decline to between 54.4c (-26.3%) and 59c (-20.1%) from 73.8c in the prior comparative period. RCL is expected to release its interims on March 6. RCL’s Rainbow unit, a chicken business, is not alone in taking financial strain. Astral Foods last month warned, in a voluntary update for the six months ending March 31, 2023, it expected its headline earnings per share to drop by 90% year-on-year to 142c as the poultry sector was devastated by high input costs and bludgeoned by load shedding.