Rainbow Chicken expects poultry prices to strengthen over the festive season as seasonal demand rises and consumers potentially have more disposable income.
The company’s headline earnings increased by 131.4% to R1.3 billion for the year ended 28 June 2026. Revenue rose by 7.7% to R17.1bn, while the final dividend increased by 125% to 45 cents per share.
The company also declared a special dividend of 75 cents per share. The JSE results announcement reported headline earnings per share growth of 130.1%.
Rainbow Chicken CEO Marthinus Stander told Business Report on Friday that the company expected poultry prices to improve during the peak trading season.
“There’s a natural rhythm to the seasons, but we’re heading towards the peak season, which means increased prices as we also come out of the colder winter. There will probably be a little bit more disposable income available,” Stander said.
Higher sales volumes, an improved product mix, firm front-end pricing and lower commodity input costs supported the company’s revenue and earnings growth.
The chicken division focused on improving farming efficiencies, while the animal-feed segment benefited from increased external sales, a focus on key customers and higher-margin volumes.
“The South African broiler industry experienced a positive trading environment, with solid market demand, firmer selling prices and lower feed costs,” Rainbow Chicken said.
“Reduced maize and soya prices, supported by healthy local crops and ample global supply, provided significant relief in a sector where animal feed remains the largest cost component.”
Rainbow Chicken said poultry volumes were also supported by volatility in red-meat and pork supply and pricing following outbreaks of foot-and-mouth disease and swine flu.
Despite the improved results, constrained consumer spending remains a key challenge.
Rainbow Chicken said rising living costs and reduced disposable incomes had affected purchasing behaviour, particularly during the final quarter of the financial year.
“Many households have cut back spending on animal protein amid financial constraints, even though chicken remains the most affordable protein source,” the company said.
It added that, although load-shedding had eased and the national energy outlook had improved, municipal failures, water interruptions, rail constraints and local infrastructure weaknesses continued to affect operational reliability.
Rainbow Chicken chief people officer Barney Khumalo told Business Report that the company was a price taker in the poultry market, meaning its earnings prospects depended heavily on consumer behaviour and purchasing power.
“We don’t necessarily set the pricing, so it all depends on the consumer. Obviously, they’re quite conscious now of where they spend, why they spend and, basically, what they can afford,” Khumalo said.
The company is focusing on areas within its control, including sales channels, customer and product mix, innovation, premium products, value-added offerings and exports.
“We’ve got the ability to change our channel, customer mix and product mix. We also look at what’s basically in our control. We focus on innovation, premiumisation, added value and other additional revenue streams such as exports,” Khumalo said.
Rainbow Chicken’s carrying value of property, plant and equipment, right-of-use assets, intangible assets and investment property increased by R348.9m to R2.6bn.
The increase reflected capital investment of R726.8m, partly offset by depreciation, amortisation and impairment expenses of R373.8m.
Cash generated from operating activities decreased by R612.6m. Rainbow Chicken attributed this mainly to the timing of receipts from Vector Logistics Proprietary Limited in the previous year, as well as the impact of dividend payments.
THE NATIONAL