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Rainbow Chicken Sees Profit Surge Over 14-Fold After Avian Influenza Recovery

Rainbow Chicken reported a remarkable profit surge of more than 14 times for the first half of the year, bouncing back from South Africa’s most severe bird flu outbreak. However, the company warned of the potential for another flare-up due to a slow vaccination campaign, according to Reuters.

In 2023, South Africa lost a third of its national chicken flock to a high-pathogenic avian influenza (HPAI) outbreak, a particularly deadly strain of bird flu that spreads rapidly. The viral disease has had devastating effects on poultry worldwide, including in France and the US, resulting in the loss of millions of chickens and ducks, and contributing to rising egg prices.

While South Africa’s poultry industry is recovering in 2024, stakeholders remain cautious, with concerns over the sluggish progress of the government-approved vaccination program, hindered by costly monitoring and testing requirements.

The South African Poultry Association has called for government subsidies for vaccinations and compensation for farmers who suffered losses during the previous bird flu outbreak.

“The threat of Avian Influenza during the winter months is real,” Rainbow Chicken stated in its financial report. “South Africa has yet to find an optimal response to this threat, particularly regarding compensation and vaccination strategy.”

For the six months ending December 2024, Rainbow Chicken posted headline earnings of 317.6 million rand ($17.51 million), a sharp increase from 21.9 million rand in the same period the previous year.

The company opted not to pay a dividend, instead choosing to reinvest its available cash flow into expanding its infrastructure as part of its strategy to become a low-cost market leader.

Rainbow produces poultry products under the Rainbow, Simply Chicken, and Farmer Brown brands and was spun off from RCL Foods, listing separately in June.

($1 = 18.1368 rand)

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