RCL Foods warns of profit drop and writedowns due to Covid-19
RCL Foods, which owns Rainbow Chicken and Selati Sugar, has warned of a drop in profits and writedowns of its businesses as Covid-19 hits South Africa’s food industry.
Headline earnings per share, a widely used profit measure in South Africa that strips out one-off items, will fall at least 30% in the group’s year to end-June, from 37.9c in the prior comparative period.
The group said in a trading update its chicken and logistics businesses were particularly hit by the South Africa’s shutdown, which has affected the quick-service restaurant industry.
The lingering impact of the pandemic on consumer demand, as well as South Africa’s sovereign ratings downgrades, will also require the company to evaluate its businesses, and could lead to writedowns, the group’s trading statement reads.
In morning trade on Monday RCL’s share price was unchanged at R9.31, having fallen 15.75% so far in 2020.
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