Rainbow Chicken has reported a sterling set of results for the 2025 financial year, but has flagged risks to the industry, including US tariff policies, volatile input costs, potential outbreaks of avian influenza and challenging SA conditions.
The group, which was unbundled from RCL Foods and was separately listed on the JSE in July last year, said its turnaround strategy is far progressed, underpinned by enhanced feed quality, refined agricultural performance and disciplined cost management.
These efforts, combined with lower commodity input costs and a reduction in expenses related to load-shedding and bird flu, have significantly contributed to improved profitability.
Revenue for the year ended June was up 9% at R15.8bn, resulting from an optimised sales channel strategy, enhanced product mix management, and higher volumes.
Headline earnings soared 224.3% to R584.8m and headline earnings per share (HEPS) more than tripled to 65.57c. The group’s enhanced profitability, supported by lower finance costs resulting from recapitalisation prior to unbundling, drove substantial improvements in both EPS and HEPS, it said.
The group declared a dividend of 20c per share.
The animal feed division delivered a strong performance, achieving margin expansion by improving operational efficiency and effectively responding to market conditions, it said.
At an industry level, the group said the US trade tariffs are a major concern. The US has imposed duties of up to 30% for all SA products exported to the US, and no agreement to resolve this has been reached. Further, the US is demanding an extension of the chicken export quota to SA linked to the historic Agoa agreement as well as self-regulation in terms of disease status.
Rainbow also flagged the inefficiency of SA’s rail system which is an impediment to lower cost distribution of raw materials such as maize.
“The work conducted by the business/government partnership to improve the country’s freight logistics network must be prioritised and driven at the highest levels to ensure the reform needed for SA to have a competitive supply chain,” it said.
“The poultry industry remains a national asset, driving growth in agriculture due to demand for maize and soya. It is a bastion for overall food security and job creation in rural SA, while providing sustainable opportunity for meaningful transformation,” it added.
To limit the spread and effect of bird flu, Rainbow has adopted a proactive approach that includes substantial investment in upgrading key facilities and the enforcement of strict biosecurity protocols.
As additional precautionary measures, Rainbow has relocated a significant portion of its flocks to more biosecure facilities in Gauteng and the North West, restricted bird movement to minimise the risk of transmission, and established hatching egg buffers within the production system.
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