Revised business model spurs profits at South Africa's RCL Foods
(Adds details, dividend, CFO quote)
JOHANNESBURG, Aug 28 (Reuters) - South African poultry
producer RCL Foods' reported a 50 percent jump in
full-year profits on Tuesday, saying the restructure of its
chicken business and growth in its grocery unit helped it
improve its performance.
Diluted headline earning per share (HEPS) rose to 94.5 cents
for the year ended June 2018, from 63 cents in the previous
year. HEPS is the main profit gauge in South Africa, which
strips out certain one-off items.
At RCL's chicken unit, earnings before interest, tax,
amortisation and depreciation (EBITDA) rose to 466.8 million
rand ($32 million) from 57.1 million rand in the year earlier
period, boosted by the company's revised business model, cost
cutting and profits from the sale of dormant farms.
"Everything that we have put in place regarding our chicken
business is paying dividends and we have weathered some
significant storms," RCL Foods' Chief Financial Officer Rob
Field told Reuters.
RCL, which produces poultry, sugar and other foods, said in
2016 it would cut poultry production and staff numbers as part
of a restructuring effort amid stiff competition from imports
from Brazil, Europe and the United States.
Despite the improvement in its chicken unit the company
faced challenges during the financial year including outbreaks
of avian flu and listeria.
South Africa's listeria outbreak in January last year, the
world's largest ever outbreak of the food-borne disease, killed
more than 200 people and infected more than 1,000.
The health department recalled processed meat products known
as "polony", which RCL also produces, after the source of the
outbreak was traced to a factory owned by Tiger Brands
unit Enterprise Foods in March this year.
RCL Foods said the listeria outbreak resulted in a 158.2
million rand negative impact during the year ended June 2018.
The company said its groceries business reported a 15.4
percent rise in EBITDA to 518.4 million rand benefiting from
favourable commodity prices.
RCL announced a final dividend of 25 cents per share,
bringing the total dividend declared for the year to 40.0 cents,
up from 30 cents a share in the previous year.
($1 = 14.6363 rand)
(Reporting by Tanisha Heiberg
Editing by James Macharia and Susan Fenton)
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