May 24, 2007

South Africa's Rainbow Chicken's earnings up 19 percent to US$92 million
 

Revenues at South Africa's Rainbow Chickens grew 15.3 percent growth to R4.73-billion (US$668 million) while operating profits rose by 13.2 percent to R654.1-million (US$92 million).

Rainbow Chickens, a poultry integrator, produces 4 million chicken meals a week.

Commenting on the results, Rainbow said that higher international grain prices, increased ethanol production in the US, together with local drought conditions has led more expensive corn prices.

It added that the local chicken market is estimated to have grown by 11.1 percent this year. Local producer broiler growth of 10 percent is expected in the next financial year with the majority of the increased volume channelled into the Individually Quick Frozen category, it said.

On the other hand, chicken imports are exported to rise 27 percent during the year, meaning more competition.

Still, the extension of the anti-dumping tariffs imposed on US chickens for a further five years is a positive development, the group added.

Looking ahead, Rainbow said that consumer spending is expected to remain positive with demand for chicken expected to remain strong but feed prices would be significantly higher this year.

Despite higher costs, Rainbow intends to upgrade its facilities to increase supply chain efficiencies and expand chicken volume capacity.

These investments would mean earnings in the 2008 financial year is likely to be lower than 2007, the group stated.