Rainbow Chicken set to soar

Rainbow Chicken is set to report even better results than previously expected, as the poultry producer’s turnaround plan is bearing fruit.

On 28 January 2025, Rainbow reported that its earnings per share (EPS) and headline earnings per share (HEPS) for the six months ended 29 December 2024 would increase by at least 1,100%.

However, on Monday, 24 February, the company informed shareholders that its EPS are expected to grow by between 1,397.5% and 1417.4%.

Its HEPS are expected to increase by between 1,339% and 1,358.9%.

In its previous announcement, the company attributed this sharp improvement to its turnaround strategy.

This plan focused on better agricultural performance, improved operational efficiencies, and higher volumes and margins. 

In addition, Rainbow Chicken’s rebound comes off a low base, as its EPS and HEPS for the same period in 2023 were just 2.36 cents and 2.46 cents.

This is because the local poultry sector faced severe challenges in 2023, including an avian flu outbreak that led to the culling of up to 8 million chickens.

These producers also faced a severe challenge amidst widespread load-shedding, which inflated their production costs and cut into their margins. 

For example, Astral Foods reported load-shedding-related costs of R1.9 billion for the year, with R45 million spent monthly on diesel to power standby generators.

However, with load-shedding now easing and bird flu under control, poultry producers largely returned to normal operations in 2024. 

Rainbow Chicken also benefited from lower finance costs over the past year due to improved profitability and a recapitalisation before its unbundling from RCL Foods.

The company was listed on the JSE’s main board in June 2024 after it was spun off from its parent company, consumer goods giant RCL Foods.

The company will publish its full interim results on 7 March 2025.