Chicken producers see a boost in profits as load shedding suspension continues

JOHANNESBURG -The suspension of load shedding continues to give some companies breathing room as chicken producers get a boost in profit margins.

A year ago, the retail sector's overall profit margin had declined due to load shedding and the costs incurred by retailers to keep running amid the energy crisis.

But in a report by the Competition Commission on essential food prices released on Saturday, JSE-listed companies, RCL Foods and Astral Foods, are among firms that have started to bounce back.

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The contingency plans required to meet market demand under tough circumstances placed pressure on bottom lines through higher operating expenses such as diesel and overtime.

Since the end of load shedding, some operating costs have dropped.

Astral Foods’ interim results show the extent to which the poultry industry has recovered from the turbulence experienced in 2023.

In the RCL stable, Rainbow’s performance also improved for the six months that ended December 2023 with revenue up 10% and profitability up from 3% to 3.9%.

"The two large, listed entities have reported improved profitability, and they are citing lower feed costs, the ability to pass through price increases and better agricultural and breeding performance," said Economist at the Competition Commission Kagiso Zwane.

While some food prices have eased, the commission said it was worried about the impact of the high costs of other basic foods on low-income households.