Top South African food producer takes a nosedive

RCL Foods took a major profit hit in the first half of its 2026 financial year, despite intensive efforts to cut costs and streamline its operations.

RCL Foods is one of the country’s biggest food producers, with well-known brands like Nola, Selati, YUM YUM, OUMA and 5 Star in its portfolio.

However, the company has been struggling in recent years, as margin pressures encouraged by a dampened consumer environment weighed on its finances.

To address this, the company has been on a mission to cut costs and streamline its operations, which included unbundling and separately listing Rainbow Chicken in 2024.

On Monday, 2 March 2026, RCL Foods released its interim results for the six months ended December 2025.

These results showed a 1.9% decline in revenue from continuing operations to R13.3 billion, which the company attributed to lower local volumes and sugar export prices.

“Despite declining interest rates and stabilised food inflation, demand for food, including staples, remains subdued, resulting in a highly competitive marketplace,” the company said.

“Consumer confidence remains negative, reinforcing a value-driven mindset as shoppers stretch limited budgets.” 

“Households continue to rely on credit, with affordability, accessibility and convenience being the defining purchase drivers shaping shopper behaviour and, in turn, category elasticity.”

These margin pressures resulted in RCL Foods’ half-year profit declining by 47.07% to R618.25 million. The food producer’s basic earnings per share fell by 43.82% to 75.9 cents.

From a segmental perspective, RCL Foods reported a mixed bag, with some divisions growing while others suffered.

The company’s Groceries division performed decently, with a 3.3% increase in revenue to R2.90 billion.

Its Baking division’s revenue also grew, though less strongly at 0.4% to R4.65 billion.

In contrast, the company’s biggest segment, its Sugar division, saw a 5.9% decline in revenue to R5.71 billion.

“The Sugar industry remains significantly affected by declining global sugar prices and deep-sea imports,” the company said.

All three of these segments saw a decline in EBITDA, with the largest decrease coming from the Sugar division at 48.5%.

Despite this, RCL Foods said it remains confident in its ability to deliver improved earnings through its strategy and by focusing on those factors that are within its control.

RCL Foods declared an interim dividend of 15 cents per share, down from 20 cents in the first half of its 2025 financial year.