January 31, 2017 / 2:42 PM / 3 years ago

South African poultry firm RCL Foods sees H1 earnings plunge

JOHANNESBURG, Jan 31 (Reuters) - South African poultry producer RCL Foods on Tuesday flagged a drop of as much as 54 percent in first-half profits as imports and high feed prices put pressure on its operations and led to job cuts at one of its plants.

The firm expects headline earning per share (EPS) to fall to between 40 cents and 55 cents for the six months to the end of December compared with 87.2 cents in the previous period, RCL said in a statement. Headline EPS is the main earnings measure in South Africa that strips out once off items.

Losses from foreign exchange and restructuring costs worsened the prospects for its earnings, RCL said.

RCL Foods said it slashed 1,350 jobs and reduce production by 50 pct at its Hammersdale factory in the KwaZulu-Natal province in November with the potential to cut more jobs if the situation has not improved.

Listed poultry producer Astral also said in July that it would cut back on production and consider job cuts as it suffered from an over-supplied domestic market.

Union members and poultry industry representatives, including those from RCL and Astral, will march in the capital of Pretoria on Wednesday to highlight the risk to jobs and call for an end to the imports.

South Africa’s poultry industry has been hurt by soaring feed prices following a severe drought and stiff price competition from increased imports from Brazilian, European and United States poultry producers. (Reporting by Tanisha Heiberg; Editing by James Macharia)

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