Report
Victor Dima
EUR 21.90 For Business Accounts Only

RCL Foods (Hold, TP ZAR 14.5/share) - H1 17A result review: HEPS c.8% better than expected; segments result mixed


  • RCL reported H1 17A HEPS of ZAR 0.48/share (-46% y/y), 8.5% above ACe (ZAR 0.44/share).
  • Revenue increased only 1.6% y/y to ZAR 13.1bn; 1.5% below ACe at ZAR 13.3bn driven by 13% y/y decline in Sugar sales (17% of group) on low cane harvest (-33% y/y).
  • EBITDA decreased 21% y/y to ZAR 900m with 200bps y/y decline in EBITDA margin at 6.9% (in line with ACe: 6.9%). Chicken business (26% of group sales) reported second consecutive loss in H1 17A with -0.9% EBITDA margin (ACe: -1%). Sugar business saw solid margin improvement, up 550bps y/y to 11%.


Underlying
RCL Foods Ltd

RCL Foods is a holding company. Through its subsidiaries, Co. is engaged in producing and marketing chicken and its related products. Co. breeds and rears its own livestock which it feeds from its own feed mills, processes, distributes and markets fresh, frozen, value-added and further-processed chicken. Co. operates in the local retail, wholesale and foodservice channels under its own brands, including Rainbow FoodSolutions, Cobb and Epol. Co. consumer brands include Rainbow and Farmer Brown.

Provider
Arqaam Capital
Arqaam Capital

Established in 2007, Arqaam Capital is a specialist emerging markets investment bank, bringing regional and international product offerings to the emerging markets. Arqaam Capital combines international best practice with expertise in the markets in which we operate. Our primary role is to provide financial intermediation and create investment opportunities for frontier and emerging markets investors looking to invest in their own markets and abroad, as well as international investors seeking opportunities in target frontier and emerging markets. Arqaam Capital is headquartered in the Dubai International Financial Centre (DIFC), with additional offices in Libya, Lebanon, Egypt, and South Africa. 

Arqaam Capital's research platform provides the largest coverage footprint of MENA equities and one of the largest on the African continent with a total of 300 stocks under coverage. Arqaam Capital is ranked as one of the leading research providers in the region - a reflection of its broad coverage universe, its in-depth and high quality research, as well the compelling investment ideas that the team generates. The analysts closely analyze their sectors and issue in-depth company and sector research while the strategy team connects the micro with the macro, focusing on index analysis, macroeconomics and strategy research. 

Analysts
Victor Dima

Other Reports on these Companies
Other Reports from Arqaam Capital

ResearchPool Subscriptions

Get the most out of your insights

Get in touch