Strong Regional Growth Impacted by Slower International Sales

Groot Drakenstein – RFG Holdings reported a strong recovery in sales volumes in its regional business for the six months to March 2025, increasing revenue by 7.6% despite continued pressure on consumer spending in the domestic market.

Group revenue increased by 3.5% to R4.0 billion, tempered by the weaker performance of the international business owing to subdued global demand for deciduous fruit products.

The Western-Cape based food producer, which owns market-leading brands Rhodes, Bull Brand, Magpie, Squish, Hinds and Today, increased regional operating profit by 4.9% to R343 million. Owing to the challenging global market conditions, the international operating profit was R73 million lower which contributed to the group’s operating profit declining by 13.9% to R343 million. Headline earnings were 11.9% lower at R231 million.

The group’s debt position improved significantly, with debt levels reducing by 30% and the net debt-to-equity ratio improving to 22.0% from 33.3%. Cash generated from operations increased by R248 million to R343 million.

The directors have demonstrated confidence in the group’s cash-generating ability and committed to declaring both an interim and a final dividend each year. The first interim dividend of 29.6 cents per share has been declared.

CEO Pieter Hanekom said the growth in the group’s regional business, which accounted for 87% of group revenue, was driven by volume growth of 9.9%.
Within the regional segment, fresh foods increased revenue by 8.3% and long life foods by 7.2%.

The fruit juice, herbs and spices, and pulps and purees categories all delivered double digit revenue growth. “Growth was supported by a major focus on product and packaging innovation, most notably the launch of the Rhodes fruit nectar juice range,” said Hanekom.

RFG continued to record market and brand share gains in key product categories. The group’s brands are the market leaders in canned meat (Bull Brand), canned tomato (Rhodes) and frozen pies and pastry (Today). The Rhodes brand holds the number two positions in fruit juice, canned fruit, jam, canned vegetables and baby food, with Hinds the number two brand in spices, herbs and pepper.

International revenue, comprising 13% of total group revenue, declined by 17.2% mainly due to weaker global demand and shifting market dynamics. Several canned deciduous fruit contracts were not honoured by customers and product was redirected to alternative markets where it was sold at lower prices. The delay in securing new customers further contributed to an 11.7% decline in export volumes. This was compounded by a shortage of canned pineapple stock due to the drought conditions in Eswatini.

On the outlook for the remainder of the year, Hanekom said he was confident that the group’s trading momentum in the regional business will continue into the second half. “Product and packaging innovation will be key to growing our brand share and expanding into new product categories.”

He said rising global tensions and escalating geopolitical risks have heightened uncertainty across international markets. “This ongoing instability has also negatively impacted South Africa’s macroeconomic outlook and slowed the country’s economic recovery.”

The oversupply of deciduous fruit products in international markets is creating pressure on volumes and pricing. “Fortunately, exports of our deciduous fruit products are gaining momentum and this should support higher international revenue in the second half of the year,” he added.

Hanekom said the group is geared to manage the significant increase expected in trade tariffs on exports to the USA and is proactively exploring emerging opportunities in other markets to mitigate the possible impact of higher tariffs.

RFG has committed capital investment of R430 million for the upgrading and maintenance of its production facilities across South Africa and Eswatini for the financial year.
Ends
Issued by Tier 1 Investor Relations on behalf of RFG Holdings

For further information contact
Graeme Lillie
Tier 1 Investor Relations
082 468 1507