Sunday, May 28, 2023 | Bull Brand-owner RFG grows earnings by over a third, even... | Bull Brand-owner RFG grows earnings by over a third, even as it spends R2m a week on diesel




’n Blik op die produksielyn van RFG se Bull Brand-fabriek in Krugersdorp.

’n Blik op die produksielyn van RFG se Bull Brand-fabriek in Krugersdorp.

RFG, the maker of the canned products like Bull Brand and Rhodes, says market share gains and a recovery in its pie business helped lift its interim profits by over a third, even as it spends R2 million a week on diesel to mitigate chronic electricity disruptions.

The company, valued at over R2 billion on the JSE, reported market share gains in fruit juices and strong growth in the meat and dry foods segment on Wednesday, saying its margins picked up as it was able pass on price increases to customers.

Although it did experience volume declines in its regional business, including SA and the rest of Africa, its pie category also experienced a recovery.

Revenue grew just over 10% to R3.8 billion in the six months to 2 April, with headline earnings rising over 37% to R217 million. Price inflation came in at 14.8%.

Fruit juice, the largest long life category, was the main driver of revenue growth through market share gains, it said, adding it retained its market share in all product categories.

A weaker rand also helped with export profits, it added.

Load shedding was continuing to “impact production output and costs”, with RFG having to invest extensively in back-up generators over the past seven years. Diesel costs to operate generators totalled R37.8 million for the six month period with RFG saying its average weekly diesel bill came to about R2 million a week at “current levels of load shedding”.

The group’s operational management teams had “performed well in difficult circumstances to limit the impact of load shedding on factory efficiencies.”

“Load shedding has accelerated our renewable energy programme,” CEO Pieter Hanekom said in a statement. “We currently have solar installations at three production facilities and a further four installations will be completed in the second half of the financial year. Another three are planned for 2024,” he said.

 On the outlook for the second half, Hanekom said the weak consumer spending environment will see volumes in the regional business remaining under pressure. “While inflation has started to ease from the heights of the 2022 financial year, we are still experiencing pressure from higher packaging and raw material costs.”

He said the current international pricing and demand for RFG’s canned fruit products are expected to be maintained. However, the business expects to ship lower volumes in the second half relative to last year as production volumes reduce to historical levels. Las year RFG increased production levels to meet the higher global demand. 

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