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S.Africa's RCL Foods delivers higher interim profit on unit performance

JOHANNESBURG (Reuters) - South African food producer RCL Foods on Monday reported a 12% increase in half-year profit, boosted by the performances of its sugar, baking and logistics segments.

RCL, which owns Selati sugar, Ouma rusks and Rainbow Chickens brands, reported headline earnings per share of 59.7 cents for the six months ended Dec. 31 from 53.3 cents last year.

Revenue during the reported period rose 10.5% to 15.7 billion rand ($1.05 billion), driven by higher volumes and improved pricing in its sugar and baking products, upbeat milling volumes and strong performances in its Vector Logistics business.

“With COVID-19 mitigation strategies firmly in place, including careful management of working capital, RCL FOODS has been able to focus on its strategic transformation agenda with the aim of creating a more resilient business with more sustainable quality of earnings,” said Chief Executive Officer Miles Dally.

RCL, however, said its chicken division was affected by higher commodity prices and the COVID-19 pandemic, resulting in a 61% slump in EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) to 85.0 million rand.

The South African company, which has been reviewing its portfolio, said a healthy balance sheet and strong cash flow have positioned RCL for upbeat annual growth.

“The Group remains of an acquisitive mindset and once the desired structure has been agreed, migration and capital allocation towards that basket may potentially include acquisitions, disposals or both,” the company said.

RCL declared an interim dividend of 15.0 cents per share, in line with the dividend in the year-ago period.

($1 = 14.9801 rand)

Reporting by Tanisha Heiberg; Editing by Christian Schmollinger and Sherry Jacob-Phillips

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