Rainbow Chicken reports profit in tough times
Rainbow Chicken in South Africa has reported a 13.6% rise in annual profit. However, the company said that earnings are likely to fall in financial 2009.
Poultry producers within the country have been hit by soaring poultry feed prices, which make up a huge part of the costs of poultry production. Additionally, consumer demand has declined and the economic situation looks grim. However, Rainbow Chicken has managed to squeeze profits.
Astral Foods recently reported a hit to their profits under these conditions. Rainbow Chicken, however, said net profit in the year to March rose 13.6% to R539 mln (€45 mln; US$71 mln). Headline earnings a share were up by less at 7.8%. Revenue was up 25.9% to R5.96 bln (€501 mln; US$785 mln).
Poultry feed cost
According to the company, year-on-year yellow maize prices in March gained 4.2% to R1 877 (€158; US$247) a tonne, but in the previous year prices had risen as much as 79.5%.
Rainbow Chicken plans to target middle and upper-end consumers this year with value-added products that carry higher margins. These include flavoured frozen pieces. The company’s core market is frozen chicken for the mass market.