CAPE TOWN – Rhodes Food says it is expecting its profits to decrease by at least 22% due to severe drought that has hit the Western Cape province.
The company says it has already fallen by more than 3.5% in early trade yesterday, saying the percentage decline can increase to 22% by the end of the next financial year.
The company said in a statement that severe droughts have pushed up the costs of canned fruit contributing negatively to its export volumes, with international units under-performing due to the weakened South African Rand.
“Canned fruit export volumes recovered in the second half of the year but were marginally down year-on-year,” Rhodes said in the statement.
Rhodes Food, which owns brands like Rhodes, Magpie, Bull Brand and Squish, says the weakened rand as well as the severe droughts pose serious threats to its business operations, both locally and internationally.
Amidst the challenges it faces, the company says it benefited a lot from last year’s acquisitions of Pakco and Ma Baker which have settled well across different African states.
“The regional performance benefited from the acquisitions of Pakco and Ma Baker which have settled well and have been consolidated for six months in this period,” the company said in a statement.
Rhodes Food also said it was doing everything in its power to balance its turnover amidst this difficult period.