Rhodes attributed increases to higher volumes, a favourable shift in mix towards higher value-add products and the 9.7% depreciation of the rand. File Photo: IOL

DURBAN – Rhodes Food Group (RFG) fell more than 6 percent in early trade on the JSE yesterday despite the group releasing a favourable trading update for the 10 months to end July, with group turnover almost achieving a double-digit growth.

The group reported that its turnover increased 9.6 percent but weak macroeconomic and consumer environment in South Africa and the rest of Africa saw the regional segment turnover rising 8.8 percent while the international segment turnover surged by 13.4 percent during the period.

The group attributed the increases to higher volumes, a favourable shift in mix towards higher value-add products and the 9.7 percent depreciation of the rand against RFG’s major trading currencies.

“Turnover growth was supported by good increases in the export of fruit snacks in plastic cups to the US and stronger canned fruit sales, with lower exports of industrial products such as purées and concentrates,” the group said.

The group added that the international operating margin strengthened as a result of the favourable product mix and the weaker rand.

It said regional business expected to trade at similar turnover levels in the remaining two months of the financial year as margin expansion had improved against a challenging in the current macro environment.

However, the share price declined to R15.82 a share, down from Friday’s closing price of R16.98. 

But RFG recouped some of the losses in the afternoon to close 0.59 percent lower at R16.88 on the JSE yesterday.

Rhodes Food is a diversified food production and processing company that delivers products to local and international retailers. 

The group said its regional long life turnover also increased by 10.8 percent, with volume growth of 6.4 percent and the group said good growth was reported in canned meats, fruit juice and dry foods, with market share gained or maintained across its core product categories.

Rhodes Food has a portfolio of strong brands that include Rhodes, Bull Brand, Squish, Magpie, Ma Baker, Pakco, Hinds, Southern Coating and Bisto. 

Rhodes Food will release its full-year results on November 19.