RCL Foods earnings fall as pet food disruption, sugar imports weigh on results

SOUTH AFRICA – South African food producer RCL Foods has reported weaker annual earnings after disruptions in its pet food operations and increased competition from imported sugar weighed on its financial performance for the year ended June 2026.

Revenue from continuing operations fell 4.1% to R24.5 billion (US$1.34 billion), while underlying earnings before interest, tax, depreciation and amortisation (EBITDA) declined 8.6% to R2.18 billion (US$119 million). 

Underlying headline earnings fell 27.1% to R951.4 million (US$52 million).

The company, which has interests spanning food, animal feed and pet food, said the pet food business was particularly affected by food-safety-related production disruptions during the second half of the financial year.

The detection of Salmonella in some dry pet food products triggered a nationwide recall, disrupting production and resulting in stock write-offs. 

The interruption constrained product supply and limited RCL Foods’ ability to meet customer demand.

“We’ve got a full plan ready to go to activate as soon as we can and win back our consumers. It won’t be easy. We fully understand that. And we do have much loved brands in South Africa as well. But a full customer and consumer strategy is ready,” said RCL Foods CEO Paul Cruickshank.

Cruickshank said pet food volumes declined 20% during the second half of the year as the business worked through the disruption.

“The 20% volume decrease has hurt us significantly, and that’s all in the second half of the year. We actually did nicely in the first half of the year. So material impact and we’re desperate to get fully up and running and supply the market and win back your pets and others,” he said.

Feed and pet food remain strategic markets

RCL Foods produces pet food brands including Catmor and Canine Cuisine, alongside animal feeds, while its wider portfolio includes sugar, milling, baking, sauces and other food products.

The company said restoring pet food production, rebuilding customer confidence and recovering market share will be key priorities in the new financial year.

The group’s sugar business also came under pressure from increased imports, with more than 200,000 tonnes of deep-sea sugar entering South Africa during the financial year.

“Sugar has been by far and away the most material impact on our results. More than 200,000 tons of imported sugar came into South Africa in our financial year and had a massive impact on our revenue,” Cruickshank said.

RCL Foods said imported sugar displaced domestic sales into lower-priced export markets, while weaker global sugar prices and a stronger rand further reduced export returns.

Despite these pressures, parts of the group performed better.

The baking division benefited from manufacturing efficiencies and volume growth, while culinary and beverages also recorded improvements.

Looking ahead, RCL Foods said it would focus on operational efficiency, revenue management and innovation.

In pet food, the company plans to execute its recovery strategy and rebuild supply and market share.

In sugar, the group expects revised reference pricing introduced in August 2026 to help reduce deep-sea imports and improve the balance between domestic and export sales.

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