Trading statement – year ended June 2017 RCL FOODS LIMITED (Incorporated in the Republic of South Africa) (Registration number: 1966/004972/06) ISIN: ZAE000179438 Share Code: RCL (“RCL FOODS" or “the Group”) TRADING STATEMENT – YEAR ENDED JUNE 2017 Comparison to reported June 2016 results Shareholders are advised that RCL FOODS expects that its headline earnings per share (“HEPS”) for the year ended June 2017 is expected to be between 57.5 cents (-41.6%) and 67.5 cents (-31.5%) when compared to the reported HEPS of 98.5 cents for the corresponding year ended June 2016. Earnings per share (“EPS”) for the year ended June 2017 is expected to be between 57.0 cents (+133.6%) and 61.0 cents (+150.0%) when compared to the reported EPS of 24.4 cents for the corresponding year ended June 2016, largely related to the Milling impairment in the prior year referred to below. Restatement of June 2016 results The prior year results have been restated for the impact of the change in the accounting standards relating to the treatment of bearer plants (IAS16 and IAS41), which has reduced the reported June 2016 HEPS by 2.0 cents and EPS by 3.3 cents. HEPS for the year ended June 2017 is expected to be between 57.5 cents (-40.4%) and 67.5 cents (-30.1%) when compared to the restated HEPS of 96.5 cents for the corresponding year ended June 2016. EPS for the year ended June 2017 is expected to be between 57.0 cents (+170.1%) and 61.0 cents (+189.1%) when compared to the restated EPS of 21.1 cents for the corresponding year ended June 2016. Material once-off items The financial results have been impacted by material once-off items in both the current and corresponding period, further details of which will be included in our results announcement to be released on SENS on 29 August 2017. These items relate to: • Impairments in the current period of R123,8 million (post tax) in the Chicken business unit relating to redundant plant and equipment identified as part of the decision to reduce commodity chicken volumes and from the related decision to dispose of the Tzaneen chicken operation. The impairments are excluded from HEPS, whilst the impact on EPS is a negative 14.3 cents; • The recognition in the current period of R37,4 million (post tax) in restructuring costs and fair value adjustments on biological assets, also associated with the decision to reduce chicken volumes. The impact on HEPS and EPS is a negative 4.3 cents; • An insurance receipt in the current period relating to the Pongola silo which was damaged in July 2015, with R84,8 million (post tax) related to the the assets portion of the claim and R20,8 million (post tax) relating to prior year business interruption. The impact on HEPS is a positive 2.4 cents and a positive 12.2 cents on EPS; • A foreign exchange loss of R27,9 million relating to the settlement of the Zam Chick Ltd ("Zam Chick") and Zamhatch Ltd ("Zamhatch") options in the current year, with the prior year including a R67,7 million gain (R118,9 million headline earnings gain) related to the accounting for the exercise of the options. The impact on EPS and HEPS for the year ended June 2017 was a negative 3.2 cents. The impact on HEPS and EPS for the corresponding year ended June 2016 was a positive 13.8 cents and 7.8 cents respectively; • The release of a R163,3 million provision in the prior year for uncertain taxation disputes raised as part of the Foodcorp acquisition. The impact on HEPS and EPS in the June 2016 results was a positive 18.9 cents; • An impairment loss in the prior year of R568,5 million (post tax) relating to the Milling operation in the Sugar & Milling division. The impairment is excluded from HEPS, whilst the impact on EPS in the June 2016 results was a negative 65.9 cents. Excluding the above once-off items, normalised HEPS for the year ended June 2017 is expected to be between 64.0 cents (+0.3%) and 74.0 cents (+16.0%) when compared to the restated normalised HEPS of 63.8 cents for the year ended June 2016. The improvement in the underlying results over the corresponding year is attributable to the recovery in the Sugar business unit on the back of the higher industry pricing and better channel mix, as well as the turnaround within the Millbake business unit with the Gauteng bakeries returning to profitability. As previously announced, RCL FOODS downsized its Chicken business unit to restore its profitability by limiting production of consequential commodity products. From 1 Februay 2017 the Chicken business unit’s Hammarsdale operation was reduced to a single shift, thereby eliminating a portion of loss making IQF (Individually Quick Frozen) product. The new business model has shown positive early results, with the Chicken business unit expected to report an EBITDA profit for the year, after posting a trading loss in the interim results to December 2016. The Group’s financial results for the year ended June 2017 are expected to be released on SENS on 29 August 2017. The financial information on which this trading statement is based has not been reviewed and reported on by the Group’s external auditors. Durban 17 August 2017 Sponsor RAND MERCHANT BANK (A division of FirstRand Bank Limited) Date: 17/08/2017 02:40:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 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