June 11, 2009
South Africa's Rainbow Chicken battered by feed costs
Rainbow Chicken's earnings declined nearly 40 percent from the year to March, due to a ZAR153 million unrealised loss of feed raw material purchase.
Revenue grew 14.4 percent to ZAR6.8 billion as the middle class continues to expand, but a historically high level of feed raw material prices have dented the company's performance.
Underlying profit declined 20.5 percent to ZAR555 million, and company chief executive Miles Dally expects the recession to continue pressurising consumer spending.
Dally said the company was unable to fully recover the 33.6-percent increase in feed costs through chicken pricings, and have instead relied on operational efficiencies.
The company's earnings depended on corn prices, which contributed to a 25 percent year-on-year loss.
Rainbow posted annual net income of ZAR317.5 million, down from ZAR539 million a year ago.
US$1 = ZAR8.06450 (Jun 11)
