UPDATE 1-S.Africa’s RCL Foods profit up 31% despite soft consumer demand

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JOHANNESBURG, Sept 2(Reuters) – South African food producer RCL Foods reported a 31% jump in full-year profit on Monday, as higher pricing offset the impact of weaker consumer demand.

The company said its headline earnings per share – a widely used profit measure – jumped to 1.216 rand ($0.0680) for the year ended June 30, up from 92.8 cents last year.

In its first set of results after spinning off and listing its poultry business, Rainbow Chicken, on the Johannesburg Stock Exchange, RCL Foods said its revenue rose by 6.8% to 26 billion rand, despite consumer demand coming under pressure in a tough economic environment.

RCL said higher sales pricing in response to sustained high input costs drove revenue during the year.

The group has been reshaping its portfolio since 2020 with a focus on growing its value-added branded business, while separating its Rainbow and Vector Logistics businesses.

The company also said a strong performance in its sugar business unit was offset by higher prices deterring consumers in both the local and export markets.

The food producer also reported higher margins in its pet food business.

Despite this, the baking business unit performed poorly, necessitating price hikes in bread, buns and rolls, which led to a decrease in sales volumes.

The group declared a final dividend of 35 cents per share for the year ended June 30. ($1 = 17.8900 rand) (Reporting by Sfundo Parakozov; Editing by Tannur Anders, Kim Coghill and Louise Heavens)

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