{"id":814881,"date":"2025-03-03T08:59:23","date_gmt":"2025-03-03T06:59:23","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=814881"},"modified":"2025-03-03T17:53:00","modified_gmt":"2025-03-03T15:53:00","slug":"south-africas-ouma-rusk-owner-sees-earnings-surge","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/814881\/south-africas-ouma-rusk-owner-sees-earnings-surge\/","title":{"rendered":"South Africa’s Ouma is doing great"},"content":{"rendered":"\n

South African grocery, baking and sugar producer RCL Foods has seen a nearly 40% jump in earnings for the six months ending December 2024, presenting a remarkable boost in operations post its restructuring.<\/p>\n\n\n\n

This represents headline earnings of R975 million for the period, up 39.2% from R701 million in the comparable period ending December 2023.<\/p>\n\n\n\n

Revenue was up to R13.56 billion from R12.85 billion before, with operating profit at R1.2 billion.<\/p>\n\n\n\n

Headline earnings per share were up 39% to 109.4 cents. The group declared a dividend of 20 cents.<\/strong><\/p>\n\n\n\n

This is the group’s first set of results since restructuring its portfolio in 2024, where it disposed of Vector Logistics and unbundled Rainbow Chicken.<\/p>\n\n\n\n

According to the group, this allowed it to focus on growing its branded businesses and its stronger brands.<\/p>\n\n\n\n

It said the main drivers of its positive results were the baking segment, which saw earnings before tax increase by R195 million, and the groceries segment (up R88 million).<\/p>\n\n\n\n

This is despite the continued challenging environment for South African consumers, who remain under pressure despite more positive turns in the wider economy.<\/p>\n\n\n\n

RCL said it has navigated this by managing price increases while being mindful of consumer pressures and constraints.<\/p>\n\n\n\n

This has been aided by price relief in commodities like wheat, the absence of load shedding and lower fuel costs.<\/p>\n\n\n\n

The group has also managed to keep its market share stable, with its brands remaining relevant to consumers.<\/p>\n\n\n\n

RCL carries many well-known and beloved brands, including 5Star Maize, Ouma Rusks, Nola, Sunbake, Yum Yum Peanut Butter and Selati Sugar.<\/p>\n\n\n\n

It also owns many pet and pet food brands like Bobtail, Catmor, Dogmor and Ultra Pet.<\/p>\n\n\n\n

Some of its brands are dominant in the market, with the group touting a 60% share of the rusk market with Ouma Rusks.<\/strong><\/p>\n\n\n\n

\"\"<\/a><\/figure>\n\n\n\n

Sugar rush<\/h2>\n\n\n\n

While the group’s business has been boosted significantly since the restructuring, it is still struggling in certain sectors, particularly in sugar, where margins have thinned.<\/p>\n\n\n\n

The sugar segment saw revenues jump 7.1%, but underlying margins narrowed by 3.7% in rand terms.<\/p>\n\n\n\n

Despite lower world market prices and increased imports, the group benefitted from a higher share of the local industry and having managed to contain costs.<\/p>\n\n\n\n

The group said it is actively involved with a ‘Sugar Master Plan 2.0’, which entails working with the Department of Trade, Industry and Competition to mitigate regulatory issues.<\/p>\n\n\n\n

Notably, RCL said that the department is supporting a delay in changes to the Health Promotion Levy (aka, the “sugar tax”) while the industry explores ways to diversify.<\/p>\n\n\n\n

“The industry is currently seeking a review of the mechanism used in determining the import duty, which is a regular occurrence over time as duties of this nature become ineffective,” it said.<\/p>\n\n\n\n

“Given the level of subsidies offered internationally and the conducive climatic conditions in key exporters, we hope to receive an outcome from the review that levels the playing field.”<\/p>\n\n\n\n

Looking ahead, the group said it is optimistic that sugar will continue to perform well but remains wary of lower international pricing and inadequate import protections.<\/p>\n\n\n\n

For its wider business operations, RCL said that it remains focused on the basics and its strong brand portfolio.<\/p>\n\n\n\n

It expects 2025 to deliver a turnaround in the economy, but still expects households to remain under pressure, leading to tough trading conditions in the short to medium term.<\/p>\n","protected":false},"excerpt":{"rendered":"

South African consumer goods and milling company RCL Foods has recorded a bumper 6 months after unbundling Rainbow Chicken and focusing on its hit brands like Ouma.<\/p>\n","protected":false},"author":10,"featured_media":792163,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[16218],"class_list":["post-814881","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-rcl-foods"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/814881","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=814881"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/814881\/revisions"}],"predecessor-version":[{"id":815018,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/814881\/revisions\/815018"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/792163"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=814881"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=814881"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=814881"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}