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Rhodes Food interim operating profit rises 6% to R173 million

The Western Cape-based firm says headline earnings increased by 2.1% to R84 million.

Rhodes Food on Tuesday reported an improved performance for the six months to March, with operating profit up 6% to R173 million while turnover increased by 9.3% to R2.7 billion.

The Western Cape-based firm, which owns such brands as Rhodes, Bull Brand, Magpie, Squish, Bisto, Hinds and Pakco, said headline earnings increased by 2.1% to R84 million.

Rhodes Food grew sales in its regional business by 8.8%, while international sales rose 12.3%, benefiting from higher export volumes and a weaker rand.

The regional business across South Africa and sub-Saharan Africa posted a resilient performance, with strong volume growth in an environment of low inflation and constrained consumer spending, said CEO Bruce Henderson.

He said the group’s profitability was impacted by the recent drought in the Western Cape on the quality of deciduous canned fruit as well as costs arising from the relocation of the group’s pulps and purees plant from Wellington to Groot Drakenstein.

“These factors were partially offset by tailwinds from the 10.5% weakening in the rand against our major trading currencies,” Henderson added.

He said Rhodes Food, which owns 15 production facilities across South Africa and Eswatini, expected a strong second-half performance despite consumer spending being under severe pressure. The international division was expected to continue improving its operating margin in the second half.

“The deciduous fruit production season has recently been completed and early indications are that the quality of fruit has improved after being affected by the drought for the past two years,” said Henderson.

“After completing our major capital investment programme, we are focused on generating returns on the capital invested and extracting benefits to improve margins across the business.”

– African News Agency

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