This article first appeared on GuruFocus .
Release Date: November 19, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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RFG Holdings Ltd ( JSE:RFG ) reported strong regional performance with resilient revenue growth despite constrained consumer spending.
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The company achieved market share gains driven by product innovation in the regional segment.
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Operating profit margin in the regional segment was robust at 10.4%, exceeding the targeted range.
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RFG Holdings Ltd ( JSE:RFG ) is set to benefit from a strategic acquisition by Premier Group, which is expected to create a stronger player in the food producer sector.
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The company has a strong market position in convenience meal solutions and a well-established brand portfolio, which is expected to support future growth.
Negative Points
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The international segment faced headwinds due to lower global demand and increased USA trade tariffs, impacting profitability.
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The operating profit margin for the international business declined significantly from 11.4% to 5.7%.
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RFG Holdings Ltd ( JSE:RFG ) experienced a 21% decline in group operating profit, partly due to a 104 million rand impairment loss in the meat business.
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The company faced challenges in the canned meat category due to high input costs and increased competitive activity.
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Trade tariffs and the expiry of trade agreements have reduced competitiveness in the USA market, particularly affecting exports of peaches and pears.
Q & A Highlights
Q: Can you expand on the rationale for the 104 million rand impairment in the canned meat division, and is the pressure on performance expected to continue? A: The impairment was calculated based on the net present value of expected future cash flows compared to the net asset value of the business's assets. The category is under pressure due to high input and packaging costs. However, we are confident in our market position and expect improvements in the next financial year. (Respondent: Unidentified_2 and Unidentified_3)
Q: What percentage of your private label revenue is from Woolworths, and what percentage of your regional revenue is in the formal sector versus the informal sector? A: The specific percentage from Woolworths is market-sensitive information, but approximately 70% of our fresh foods business is related to private label. Regarding regional revenue, about 55-60% is from retail, 10-15% from wholesale, and around 10% from Africa business. (Respondent: Unidentified_2 and Unidentified_1)
Q: Are there any particular categories you're feeling the pain in due to US trade tariffs, and will RFG consider exiting the US market? A: The main categories affected are peaches and pears due to high tariffs, making it difficult to compete, especially against Greece. While we are small players globally, we are exploring alternative markets but do not plan to exit the US market immediately. (Respondent: Unidentified_1 and Unidentified_2)
Q: Do you expect the acquisition of CCBA by Coca-Cola Hellenic to increase competition in the juice market? A: We do not foresee a significant increase in competition in the juice category, as Coca-Cola Hellenic does not manufacture paper packaging themselves. We remain confident in our value offering and vertical integration in the juice market. (Respondent: Unidentified_1 and Unidentified_2)
Q: Why has there been a consistent share loss in the infant meals category despite a cost advantage? A: The infant meals category is competitive, with many meals being prepared at home. We have a competitive advantage with our facility and raw material proximity. Despite new competitors, we are confident in our ability to grow in this category. (Respondent: Unidentified_2 and Unidentified_1)
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
