Rainbow Chicken Limited (“Rainbow” or “the Company” or “the Group”) has recorded a significant 81.4% EBITDA increase to R1.1 billion for the six months ended December 2025 (“the current period”), compared to the same period in the previous year (“the previous period”).
The ongoing implementation of Rainbow’s growth strategy, supported by strong demand for chicken, lower input prices and the strengthening of the South African Rand versus US Dollar, has contributed to an improvement in profitability over the first half of the 2026 financial year.
Revenue grew by 11.3% to R8,8 billion, when compared to the previous period, positively impacted by stronger demand, enhanced channel and product mixes and improved pricing. Both headline earnings and headline earnings per share have more than doubled in the current six-month period, by 110.8% to R669,6 million and 109.9% to 74.81 cents respectively.
Within its growth strategy, Rainbow continues to focus on disciplined capital investment aimed at improving operational efficiency, increasing capacity, and mitigating biosecurity risk. Over the six-month period, replacement capital expenditure amounted to R287,5 million. Key capital initiatives during the period included enhancements to processing and farming equipment, bio-security investments to control Avian Influenza, the upgrade of the grandparent hatchery, investment into water filtration systems and the commencement of phase two of the IT separation project (as part of Rainbow’s transition from RCL FOODS’ platforms).
“Our continued emphasis on internally controlled and well-managed operational fundamentals positions Rainbow to respond effectively to evolving demand and to support sustainable performance over time,” emphasises Stander.
Chicken Division
“Within South Africa, chicken remains the most widely consumed protein and continues to play a critical role in national food security, particularly in an environment of constrained consumer spending and volatility in red meat and pork pricing following the foot-and-mouth disease and swine-flu outbreaks,” explains Stander. “Against this backdrop, Rainbow is firmly focused on delivering exceptional value through innovative products and an optimised product mix that is responsive to market trends, brand aspirations, and customer and consumer needs.”
The upward movement for the Chicken Division in both revenue (by 11.5%) and EBITDA (by 126.2%) was driven primarily by strong demand, a relentless focus on agricultural and operational performance, a notable reduction in feed input costs, and ongoing product and channel diversification aimed at serving a growing customer base.
Over the past two years, Rainbow has doubled its processing capacity at the Hammarsdale facility, introduced new technologies and continued to improve its core asset base.
The Company’s integrated value chain also enables Rainbow to support small-scale farmers through the supply of affordable, high-quality day-old chicks and feed. By shortening the supply chain, Rainbow empowers emerging farmers and, by supporting inclusive growth, aims to help build sustainable businesses that can participate more fully in the industry.
Animal Feed Division
Feed costs remain the largest component of poultry production costs and, therefore, have a significant impact on the overall competitiveness of the business. Rainbow’s strategy for its Animal Feed Division is firmly anchored in supporting the expanding internal requirements of the growing Chicken Division, reinforcing the Group’s vertically integrated operating model.
However, in parallel, a meaningful portion of the total feed production is supplied to external customers, positioning the division for growth. The external feed business is underpinned by a strong value proposition focused on high-quality feed, consistent performance and technical reliability, which continues to drive customer retention, market penetration and sustainable earnings growth.
For the current period, revenue increased by 1.7%, driven mainly by higher volumes across internal and external channels, although selling prices were marginally lower than the previous period, largely reflective of the reduced commodity input costs. An ongoing focus on operational efficiencies, together with strategic raw material procurement, resulted in an incremental improvement in EBITDA.
Waste-to-Value (“W2V”) Division
Rainbow’s W2V Division plays a strategic role in converting waste from poultry farms and processing plants into renewable energy, directly supporting the Company’s sustainability and cost-efficiency goals.
Decreases in revenue of 1.3% and EBITDA of 11% compared to the previous period are largely attributed to the non-renewal of the contract for the sale of green gas certificates, partially offset by additional revenue earned on electricity and water generation. While the Worcester W2V plant continues to produce acceptable results, the Rustenburg W2V operational issues remain a key focus area for management.
Poultry Industry Matters
Chicken production in South Africa has grown at a rate faster than consumption over the past decade, despite significant local and global challenges. With a notable decline in feed prices and competitive production costs relative to other major producing countries, the South African industry could be poised to take advantage of growth opportunities. However, having replaced a substantial portion of imports since 2018, import replacement opportunities are limited, and exports will be key to enhanced growth.
Progress has been made on South Africa’s 2019 Poultry Master Plan, developed in close partnership with Government and industry stakeholders to expand the market and grow consumption. However, there is still much work that needs to be done to enable and support meaningful exports which are necessary for the long-term growth of the industry.
Significant uncertainty remains regarding the African Growth and Opportunity Act (“AGOA”) which has now been reauthorised by the United States for a limited period ending 31 December 2026. The concern from the industry is that a 72 000-ton chicken quota, exempted from anti-dumping duties, remains available to the United States, while South African industries do not benefit from AGOA, given the more recent and volatile tariff environment.
In the South African Minister of Finance’s 2026 Budget Speech, it was highlighted that rail recovery and investment would be prioritised through funding commitments and infrastructure allocations, which we welcome as an important step in strengthening South Africa’s rail logistics network. In terms of raw materials for poultry feed, the country’s rail system is not yet able to provide a distribution solution that is more cost‑effective or efficient than road transport and it therefore remains essential for Rainbow that the freight logistics network is prioritised.
Avian Influenza remains a threat to the entire industry. The overall cost and conditions of the Government-introduced Avian Influenza vaccination drive remain prohibitive for both the table egg and chicken industries and discussions are underway with the authorities to remedy this situation. However, the recent roll-out of a practical vaccination plan for foot-and-mouth disease is encouraging.
Rainbow is cooperating with the Competition Commission in its inquiry which is focused on the perceived concentrated and integrated nature of the industry. The terms of reference of the inquiry were gazetted on 30 September 2025, however it has yet to begin. The concern is that the inquiry may impede transformation and prevent fair competition. Integration and scale are key to low-cost production, which ultimately benefits the South African consumer. International studies confirm that the local industry is globally competitive and it would be unfortunate if this position was compromised in any way.
Outlook
The business strategy for the second half of the year is ‘more of the same’: a relentless focus on cost containment and improved efficiencies. Stander says: “The leadership team will continue to concentrate on what is in our control, including best-in-class farming practices, product quality, cost management, investment in infrastructure and an ensuring an efficient asset base.”
The operating environment within which Rainbow operates will continue to change. Ongoing risks include the impact of US tariff policies, volatile input costs, recent developments in the Middle East and challenging South African trading conditions. In this context, ensuring the business remains competitive in efficiency, cost and product diversity, as well as being compliant with Government regulations, is critical.
As demand dynamics evolve in response to market conditions, Rainbow remains focused on innovation across its product offering to deliver affordable, quality protein and advance its purpose of nourishing the nation.
A key pillar for the business success is management’s intense focus on people and driving a high-performing culture that delivers results.
“While we remain steadfast in our ambition to be South Africa’s market-leading, best-in-class and lowest-cost chicken producer, we also recognise that Rainbow operates within a highly cyclical and commoditised industry which requires continual reinforcement of the long-term strategy to ensure business continuity is centred on delivering sustainable profitability,” concludes Stander.