RFG Holdings said yesterday its revenue increased by 1.4% in the 11 months ended August 2024, after its international volumes in particular were affected by lower pricing and port delays.
The group said in a trading update its regional segment delivered resilient revenue growth in an environment of sustained pressure on consumer disposable income due to high electricity, food and living costs together with high interest rates.
Revenue in the international segment was impacted by softer global pricing and demand for canned deciduous fruit, and lower volumes due to shipping delays at the Cape Town and Durban ports.
Group revenue growth was driven by selling price inflation of 5.4% as higher input costs continued to be recovered.
Despite the pressure on volumes, management focused on driving profitable growth, recovering costs, generating operational efficiencies from recent capital expenditure and applying tight cost management to maintain the 10% medium-term operating profit margin target.
Regional revenue increased by 5.3% with price inflation of 8.1%. Sales volumes were lower due to constrained spending and competitor promotional activity in some product categories.
The rate of volume decline slowed to 2.5% from April to August 2024 relative to a 5.5% decline reported for the first half to March 2024.
Fresh foods reported stronger revenue growth in the five-month period compared to the first half. This was supported by volume growth in the ready meals category and a solid volume contribution from the pie category.
Sales of long-life foods slowed in the five-month period versus the first half, but the fruit juice and dry foods categories delivered good revenue growth.
The international revenue decline was due to softer international pricing and lower demand for canned deciduous fruit relative to the prior year. This was partially offset by the 1.6% depreciation of the rand against the group's basket of trading currencies which had a 1.4% positive impact on revenue in the segment.
Export volumes fell 10.4% due to lower opening stock levels and delays in international shipments due to the ongoing congestion at the Cape Town port. This was compounded by extreme winter weather conditions during August, with the port delays currently averaging approximately three weeks.
BUSINESS REPORT