South Africa-based RCL Foods has issued a profit warning related to the coronavirus outbreak and the subsequent lockdowns and suspension of its foodservice operations.
The publicly-listed branded and private-label food supplier said headline earnings per share (HEPS) for the year through June are expected to be 30% lower than last year, when it booked an end result of 37.9 cents based on revenues of ZAR25.9bn (US$1.5bn).
Final numbers will be presented around 31 August.
“The Covid-19 pandemic and the nationwide lockdown implemented by the South African government has had a significant impact on the group’s results,” according to a filing with the Johannesburg stock exchange. “The chicken and Vector operations have been most affected due to the shutdown of the quick-service restaurant industry.”
RCL also noted the negative impact from the downgrade to South Africa’s credit rating by Moody’s and Fitch Ratings earlier in the year, which will “necessitate an evaluation of the carrying values of the group’s assets for possible impairments”.
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However, the company said it is “well capitalised and is managing liquidity as a priority during the pandemic”, which has also hit consumer spending.
RCL manufactures a range of food products such as the Nola brand of mayonnaise, Yum Yum peanut butter, Sunbake bakery items and chicken products under the Rainbow line.
At 37.9 cents last year, HEPS was down 60.8% while revenues climbed 5.5%. EBITDA was up 25% at ZAR1.5bn.