Covid-19: South African food giant’s international business plunges into the red
Effects of lockdown and delays at Cape Town port slash exports
Rhodes Food Group’s (RFG) international segment has reported a loss of ZAR44 million (USD2.40 mln) for the half year to March 29, compared with a profit of ZAR3.7 mln for the same period a year ago.
However, overall RFG results showed an increase in turnover of nearly 10% to ZAR2.9 billion, thanks to an 11.5% increase in sales to its domestic market and across sub-Saharan Africa. Sales in March were up by more than 22% as South African consumers scrambled to stock up before lockdown.
Profit after tax was down 3% to ZAR77.8 mln.
Long Life Foods increased turnover by 12.6% (6.3% volume growth) with good growth in fruit juices and baked beans and particularly strong sales in canned fruit, vegetables and meat in March before the start of the lockdown.
Canned fruit sales to China were considerably affected by the coronavirus outbreak, as the country’s bakery industry, which buys large-sized peach slices, went into lockdown and deliveries had to be sold off at discount prices.
However, chief executive Bruce Henderson was upbeat about future prospects, commenting: “We expect a slow recovery in the export of canned fruit into China from around July this year. However, the recent deterioration in the rand against the US dollar exchange rate will have a significant effect on international profitability in the second half of the financial year.”