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Rainbow Chicken Limited - Press Release
Rainbow Chicken Limited
(Incorporated in the Republic of South Africa)
Registration No: 1966/004972/06
ISIN: ZAE000019063
SHARE CODE: RBW
At the Annual General Meeting of the company held at Hammarsdale on 31 July
2002, the Chairman, Mr M H Visser, made reference to the following significant
matters within the "prospects" section of the Rainbow Chicken Limited Annual
Report for the year ended 31 March 2002.
COMMENTS BY THE CHAIRMAN
"In our annual report we commented on the high raw material input costs driven
mainly by the weakening of the Rand. In referring thereto we reported:
"In the event of the Rand not strengthening significantly the group is
unlikely to improve appreciably on its current levels of profitability and may
indeed have difficulty keeping its current performance levels."
We additionally, regarding the Group`s performance in the first six months of
the financial year ending 31 March 2003, stated:
"As the most dramatic feed price increase occurred recently, performance is
expected to be more adversely affected in the first six months of the new
financial year compared to the same period last year."
CURRENT YEAR PERFORMANCE
In reference to the first quarter of the current financial year, the year ending
on 31 March 2003, the following has prevailed:
OPERATING ENVIRONMENT
Macro environment
* An economic slow down with CPI rising from 5,9% to 8,3% and the prime
interest rate rising from 14% to 16%;
* Price inflation in the agricultural sector of maize and wheat
rose by 30%; and
* Since the year end the Rand has strengthened from a ratio of R11,3 :
$1 to R10 : $1 but is still significantly weaker than that ruling during
September 2001 (R8,6 : $1).
The industry
* The envisaged cost pressures have materialised but the realisation
increase did not match this. This put margins under pressure, resulting in an
exit or failure of some small players; and
* The milling industry is doing well, but could come under pressure if
volume demand falls away resulting from the above exit and/or failure.
Rainbow Chicken Limited
* The expected production cost increases have materialised and have not
been fully recovered by realisation increases;
* Operating efficiencies continue to bear fruit as expected;
* Increased volumes are reflective of improved operational efficiencies;
and
* Procurement strategies have served as a buffer and created margin
opportunities.
All-in-all, the group is holding its own.
RAINBOW CHICKEN LIMITED`S PERFORMANCE PROSPECTS FOR THE HALF-YEAR ENDING
30 SEPTEMBER 2002
The significant pressure on the margins in the poultry industry has
dominated the first quarter of the financial year (ended 30 June 2002). This
pressure has been relieved by the greater farming efficiencies as well as a
solid performance from Epol on the feed milling side of the business. Should
this continue, we expect the profitability for the first half of this year to be
of a similar magnitude to that of the same period of last year."
FOR FURTHER INFORMATION PLEASE CONTACT:
Rainbow Chicken Limited
Yannick Lakhnati, Chief Executive Officer
Telephone: (031) 736 2524
Fax: (031) 736 2559
Date: 01/08/2002 02:39:00 PM Produced by the JSE SENS Department
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