Rhodes’s profit falls after disappointing performance from international business
Food producer Rhodes Foods on Tuesday reported a 20% drop in full-year net profit to R234.8m, let down by a disappointing performance from its international business.
The relatively strong rand, a reduced demand for industrial pulp and puree products, and higher costs on canned fruit as a result of the drought in the Western Cape weighed on the international business.
Rhodes Food produces fresh, frozen and long-life convenience meal solutions across SA, sub-Saharan Africa and major global markets.
Group turnover in the year to end-October was up 10.8% to R4.6bn, boosted by its regional segment (SA and sub-Saharan Africa) collectively accounting for 80% of the revenue.
The company said that in the new financial year it would focus on driving organic growth in its regional business and maximise benefits from Pakco and Ma Baker, which the company acquired recently.
"While the outlook for the international canned fruit market is positive, the continued drought in the Western Cape is expected to adversely impact input costs owing to poorer quality fruit, which will give rise to lower yields and higher labour costs," it said.
The dividend was cut to 31.1c per share, from 42.2c in the year-earlier period. Diluted headline earnings per share (HEPS) dropped 27% to 93.4c, after issuing more shares for acquisitions.