Major food producer under pressure in South Africa

RCL Foods expects to take a significant knock to its earnings in the first half of its 2026 financial year.

This comes as the food producer has struggled in South Africa’s subdued food market, characterised by falling consumer sentiment and uncertainty around global trade and political relations.

The company has also previously pointed to continued lacklustre GDP growth in South Africa and sustained high unemployment rates as factors that are dampening consumer demand.

RCL is one of South Africa’s leading food manufacturers, producing iconic brands such as Nola, Selati, YUM YUM, OUMA and 5 Star.

On Tuesday, 24 February, RCL informed shareholders that it expects significantly lower earnings for the first half of its 2026 financial year.

The company previously told shareholders that its earnings per share (EPS) would be at least 40% lower, and headline earnings per share (HEPS) would be 25% lower, compared to the first half of its 2025 financial year.

However, the company has now updated its expectations, saying EPS are expected to fall by between 45% and 42.6% while HEPS are expected to be between 32.1% and 29.2% lower.

“In the current period, headline adjustments were insignificant with a marginal EPS, and HEPS expected to be reported,” the food producer said.

In its latest results for the 2025 financial year, RCL reported a mixed bag, with strong earnings and profit growth from continuing operations, while discontinued operations weighed on group results.

RCL Foods saw its revenue increase by a modest 1.8% to R26.5 billion, while EBITDA shot up by 11.4% to R2.56 billion.

The company’s basic earnings per share declined by 1.26% to 180.1 cents, dragged down by a significant decline in earnings from its discontinued operations.

However, basic earnings per share from continuing operations grew by over 19% to 158.7 cents per share.

The company’s discontinued operations in this period included Rainbow Chicken, which was unbundled and separately listed in July 2024, and Vector Logistics, which was disposed of in the 2024 financial year.

RCL’s interim results for the six months through December 2025 are expected to be released on 2 March 2026.