Rainbow Chicken Reports Slump in Profits

by 5m Editor
20 August 2013, at 8:17am

SOUTH AFRICA - Rainbow Chicken warned of a sharp slump in annual profit due to fallout from soaring input costs and record levels of imports.

According to BusinessReport, the company forecast earnings a share and headline earnings a share from continuing operations for the 12 months to June would be between 80 per cent and 100 per cent lower than those of the prior year.

Rainbow said the results were also affected by costs of R45.6 million for its acquisition of an effective 64.2 per cent shareholding in New Foodcorp Holdings.

"Despite the inclusion of Foodcorp’s trading results for two months (the effective date of the acquisition was 1 May 2013), earnings were negatively affected by the deterioration in the exchange rate impacting the valuation of Foodcorp’s euro-denominated senior secured notes," Rainbow said in a trading update released after the market closed.

Rainbow closed 2.36 per cent up at R16.89, while the food producer index increased by 0.2 per cent.