Rainbow Chicken RBO has reported an over 14-fold increase in half-year profits due to recovery from a serious bird flu outbreak in 2023. The firm warns of potential future threats due to a sluggish vaccination campaign and advocates for government support in addressing these issues. The company is reinvesting in infrastructure to enhance its market position.
South Africa’s Rainbow Chicken RBO has reported a remarkable increase in half-year profits, surging over 14 times as the company rebounds from the severe bird flu outbreak of last year. However, it has issued a warning regarding the potential for another outbreak, citing a sluggish vaccination campaign.
In 2023, South Africa’s poultry industry faced significant losses, with a third of its national chicken flock succumbing to high-pathogenic avian influenza (HPAI), a viral disease characterized by rapid transmission and high mortality rates. The impact of such outbreaks has been felt globally, leading to substantial losses in poultry populations and escalating egg prices.
Despite the recovery of the poultry sector in 2024, stakeholders remain cautious due to challenges faced by a government-approved vaccination program, which has encountered slow progress attributed to high monitoring and testing costs. The South African Poultry Association advocates for government support to subsidize vaccinations and to compensate farmers for financial losses suffered during the previous outbreak.
Rainbow Chicken highlighted, “The threat of Avian Influenza during the winter months is real,” emphasizing the urgent need for a strategic response to both compensation and vaccination concerns. For the six months ending December 2024, the company recorded headline earnings of 317.6 million rand ($17.51 million), a substantial increase from 21.9 million rand in the same period of 2023.
In pursuit of expanding its operations and market presence, Rainbow opted not to distribute dividends, instead directing available cash flow toward infrastructure development. The company produces poultry products under well-known brands such as Rainbow, Simply Chicken, and Farmer Brown, having recently conducted a corporate spin-off from RCL Foods to operate independently since June 2024.
In summary, Rainbow Chicken has achieved a significant profit increase following recovery from a devastating bird flu outbreak, although it faces ongoing risks from potential future outbreaks. Efforts to bolster vaccination campaigns and government support are crucial for the poultry industry. The company’s strategy of reinvesting profits into infrastructure positions it for future growth and competitiveness in the market.
Original Source: www.tradingview.com
