The group is battling with a sharp drop in profits as the pandemic batters the food industry
RCL Foods, which owns Rainbow Chickens and Selati sugar, has warned of a drop in profits and R1.5bn in writedowns of its businesses due an economic hit from Covid-19.
The group expects headline earnings per share in its year to end-June to fall as much as 70.4% from the prior period’s 37.9c. HEPS strips out one-off items, including impairments, to give a better indication of underlying performance.The group said that, excluding the effect of the pandemic, it would have “delivered a meaningful growth over the corresponding period”.
“Importantly, RCL Foods finished the current period in a strong cash position with healthy underlying cash generation,” the statement read. In afternoon trade on Thursday, RCL’s share was down 3.8% to R8.85, giving the group a market capitalisation of R8.3bn.
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