Rainbow Chicken says that its growth strategy continues to deliver improvements across agricultural key performance indicators, as it announced that its headline earnings doubled and cash equivalents increased to R1.7bn compared to the R970.8m in the half-year period ended on December of 2024.
However, the company says it remains vigilant when it comes to headwinds affecting the agriculture sector and the South African economy at large, such as continued global trade fragmentation and the foot-and-mouth disease outbreak that the department of agriculture continues to respond to.
“The overall cost and conditions of the government-introduced avian influenza vaccination drive remain prohibitive for both the table egg and chicken industries, and discussions are under way with the authorities in an attempt to remedy the current situation. The recent rollout of a practical vaccination plan for foot-and-mouth disease is encouraging in this regard,” it said.
The announcement said uncertainty remains regarding the African Growth and Opportunity Act (Agoa) despite its reauthorisation by the US until December 31 2026.
“The concern from the industry is that a 72,000-tonne chicken quota, exempted from anti-dumping duties, remains available to the US, while South African industries do not benefit from Agoa any more, given the more recent and volatile tariff environment.”
Rainbow has proactively invested in upgrading key facilities and enforced strict biosecurity protocols to help mitigate the risk of any potential outbreaks.
— Rainbow Chicken
In its interim results, released on Wednesday morning, Rainbow Chicken announced headline earnings of R669.6m, which is up 110.8%, earnings of R669.5m, up 111.2%, and EPS of 74.79c, which is 110.2% up. Revenue is 11% up to R8.8bn. Despite these results, the company warned that avian influenza remains a threat to the industry.
“Rainbow has proactively invested in upgrading key facilities and enforced strict biosecurity protocols to help mitigate the risk of any potential outbreaks. Recognising this as a risk to the entire industry, Rainbow collaborates with various industry stakeholders in an effort to collectively address this risk and implement appropriate and necessary actions.”
“Property, plant and equipment, right‑of‑use assets, intangible assets and investment property increased by R106.4m since the commencement of the financial year. The movement primarily reflects capital expenditure of R296.4m, partially offset by depreciation and amortisation charges amounting to R188.1m.”
The interim results announcement said that over the six months, Rainbow continued strengthening its core asset base through disciplined capital investment aimed at improving operational efficiency, increasing capacity and mitigating risk.
“Replacement capital expenditure amounted to R287.5m, while expansion-related capital expenditure totalled R2m. Furthermore, capital commitments amounting to R123.3m have been committed but remained unspent at period end, while an additional R248.0m has been approved and is yet to be contracted.”
The statement said key capital initiatives included:
- enhancing processing and farming equipment;
- biosecurity investments to control avian influenza;
- the upgrade of the grandparent hatchery;
- investment into water filtration systems; and
- phase 2 of the IT separation project.
“Water and energy security remain key strategic focus areas for the business. Accordingly, capital investments are being planned over the next five years to secure a reliable and affordable supply, while minimising operational disruptions and supporting business continuity.”
Total unaudited liabilities for the period ended at December 28 2025 stood at R4bn while total equity stood at R5.1bn.
TimesLIVE
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