RCL Foods Surges with Impressive 38.8% Half-Year Earnings Growth: What This Means for South Africa’s Food Sector

JOHANNESBURG (Reuters) – RCL Foods, a major South African food producer, announced a significant 38.8% increase in its half-year earnings. This boost is largely due to strong performances in its groceries and baking divisions.

Brands under RCL Foods, such as Selati sugar and Sunbake bread, contributed to this success. The company reported that its headline earnings per share rose to 109.4 cents in South Africa from 78.8 cents a year earlier.

Additionally, RCL Foods’ earnings before interest, taxes, depreciation, and amortization (EBITDA) surged by 25.1%, reaching 1.5 billion rand (around $80.52 million). This growth was supported by cost-saving initiatives and better production efficiency.

Revenue also saw a 5.4% increase, climbing to 13.6 billion rand. The grocery and baking units performed well, along with a solid showing from the sugar segment.

Despite challenges in the broader South African food market, RCL Foods managed to thrive. The absence of power cuts and some price relief in key commodities allowed them to carefully manage their price increases. CEO Paul Cruickshank noted that this strategy provided some relief to consumers facing financial pressures.

The company’s board declared a dividend of 20 cents per share, a positive sign after not issuing a dividend in the previous period.

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RCL Foods, food producer