Rhodes Food Group, which makes Bull Brand corned meat and Bisto gravies, says profit after tax was slightly down in the six months to end-March despite better sales.
The group made a net profit of R80.2m, from R80.9m previously, while turnover rose 9.3% to R2.7bn.
Margins were slightly weaker because of lower international selling prices of deciduous canned fruit products as a result of “drought-related quality issues”, the group said.
Profits were also hit by once-off costs from the relocation of the group’s pulps and purees plant from Wellington to Groot Drakenstein.
“The business experienced further margin pressure due to low levels of inflation,” it said.
On Monday, Pioneer Foods’ half-year results showed that the industry is struggling to pass on higher costs to consumers.
Rhodes Food Group said margin pressures were partially offset by currency movements.
The company said its long-life foods segment increased turnover by 13.4% thanks mainly to better volumes.
Group headline earnings increased by 2.1% to R84.1m.
“The group anticipates a strong second-half performance despite consumer spending being expected to remain under severe pressure in the months ahead,” it said.
The deciduous fruit production season was complete.
“Initial assessments reflect an improvement in the quality of the fruit after being affected by the drought for the past two years. Volumes were, however, slightly lower than the previous year.”
With the group’s “major capital investment programme” now complete, it was focused on generating returns on capital invested “and extracting benefits to improve margins”.
Rhodes Food Group said it planned to spend R80m on capital investment in the second half of the financial year.
“Key projects include the expansion of warehouse capacity at the fruit juice plant, ongoing development of the new pineapple plantations in Eswatini and the completion of the infrastructure upgrade at Groot Drakenstein,” it said.
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