RCL interim earnings plunge
Crisis in chicken industry sees half of workforce at Rainbow plant retrenched and hefty losses of up to 54%
RCL Foods, one of SA’s biggest chicken producers, says it faces a bleak future as it lays off 1,355 workers — or half the workforce — at its large Hammarsdale operations in KwaZulu-Natal. It says the South African chicken industry faces "severe challenges" from dumped imports and high chicken-feed input costs due to drought. This will see headline earnings per share plunge between 54.1% and 36.9% in the six months ended December compared to the same period in 2015. "The chicken business unit has initiated a programme to reduce its Hammarsdale operations to a single shift … eliminating a portion of unprofitable IQF [individually quick-frozen] product," the group said in a trading update on Tuesday. The update included three abnormal items: R37.4m after-tax provision for restructuring costs linked to the reduction in chicken volumes; an after-tax impairment of R102.7m for redundant plant and equipment related to this, and a foreign exchange loss of R27.9m. Scott Pitman, MD of the grou...
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