JSE-listed RCL Foods has reported a decrease in revenue from continuing operations of 1.9% to R13.3-billion for the six months ended December 31.

The company has also reported a 24.6% year-on-year decrease in earnings before interest, taxes, depreciation, amortisation and impairments (Ebitda) from continuing operations to R1.17-billion.

RCL Foods' underlying Ebitda from continuing operations decreased by 14.6% to R1.19-billion.

The company explains that this result was largely owing to adverse market dynamics within the sugar industry which had a material negative impact on the performance of its sugar business unit.

The underlying view of the results excludes material one-offs and accounting adjustments.

Total earnings per share (EPS) were down 43.8% to 75.9c, while total headline earnings per share (HEPS) and HEPS from continuing operations was down 30.6% to 75.9c.

RCL Foods notes that the Groceries and Baking business units experienced volume pressure but profitability was supported by continuous improvement (CI) and net revenue management (NRM) initiatives as well as input cost relief in certain commodities.

Groceries benefitted from improved margins in culinary aided by CI and NRM initiatives, higher volumes in pet food and a favourable product mix in beverages.

As referenced in the company’s media release issued on March 1, the company explains that production at its dry pet food plant was temporarily paused.

RCL Foods notes that this affected its ability to fully service demand towards the latter part of the current period and into the second half of the financial year.

The company says processes to restart the facility have begun, with full production expected to resume shortly.

Meanwhile, the company reports that the Baking business unit delivered an underlying performance in line with the prior period, amid a challenging trading environment, with volume declines across the bread, buns and rolls and milling categories, offset by good performances in pies, driven by higher volumes and CI savings, and speciality, achieved through operational efficiencies and successful innovation.

Additionally, the company notes that sugar continues to experience significant headwinds and volatility owing to inadequate tariff protection, declining world market prices and the strengthening rand which have resulted in a substantial increase in deep sea imports.

RCL Foods notes that local market volumes have been displaced by the high volumes of imports, resulting in a higher proportion of local sugar supply having to be sold in the lower priced export market.

The company explains that the tariff formula is currently under review with the International Trade Administration Commission of South Africa, adding that an urgent resolution is critical to protect the sustainability of growers and millers within the South African sugar industry.

“Despite these challenges, the business performed well operationally through improved efficiencies at our mills. Molatek was down on the prior period primarily owing to lower volumes,” the company says.

Discontinued operation results in the comparative period relate solely to the noncash gain realised on accounting for the unbundling of Rainbow which is excluded from headline earnings.

RCL Foods has noted that the board of directors has approved a gross cash dividend of 15c a share – 12c a share net of dividend withholding tax – for the six month period ended December 2025.

The dividend has been declared from income reserves.

The company says a dividend withholding tax of 20% will be applicable to all shareholders who are not exempt.

The issued share capital at the declaration date is 898.59-million ordinary shares.