Rhodes reports rising demand for tinned goods


Rhodes reports rising demand for tinned goods

Published Date: 2020-03-24 | Source: Stephen Gunnion | Author: Stephen Gunnion

Rhodes reports rising demand for tinned goods

Households are stocking up on long life products including canned meat and vegetables and baby food due to Covid-19.

Rhodes Food Group has seen a spike in sales of ready meals and pies, boosting turnover at its regional fresh foods business. The food producer says due to Covid-19, households are also stocking up on long life products including canned meat and vegetables and baby food. However, it says there's been a dip in exports of canned fruit to China since January following the outbreak of the pandemic.

In a trading update for the five months to end-February, Rhodes said turnover for its regional segment, including SA and the rest of Africa, rose 9.3% from a year earlier. Regional fresh foods turnover jumped 15.9%, with volume growth of 3.5% and acquisitive growth of 4.3%. Regional long life turnover rose 5.7%, supported by sales of fruit juices and baked beans. It said the operating profit margin for the regional segment improved, but at a slower rate than expected. Trading for March had been strong across all categories, with a rise in canned food volumes following the national state of disaster being declared in the country, it said.

International turnover dipped by 1.7% over the five-month period due to limited exports to China, which resulted in an 11.3% decline in international volumes. It said this was partially offset by higher prices and the weaker rand. Although some of the excess volume of canned fruit destined for China was exported to other Asian markets, a significant volume would be placed in alternative markets at lower margins than those typically achieved in China. It expected a slow recovery of volumes into China from around the middle of the year.

Rhodes said the Covid-19 outbreak hadn't affected any of its manufacturing facilities and it had implemented precautionary measures to reduce the risk of staff, contractors and visitors to its operations contracting the virus.

Rhodes added that its interest payments for the six months to end-March were likely to be R5 million down from last year due to lower debt levels.

Its shares fell 4.15 to R11.50 yesterday.

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