I'll cover some of that, obviously, when I do the trade review as well. In more detail. We've seen export volumes declining by 11.7% due to delays in securing alternative customers for canned food products specifically, and in the Eswatini part of our business we saw a shortage of canned pineapples due to a drought that we experienced in the prior year. Our group profitability declined due to the international segment, but our regional operating profit remained stable at a 9.8% operating margin, although down by 20 basis points. We had a challenging international segment that contributed to the group's operating profit margin declining by a 70 basis points to get to a 8.5% operating profit margin. With regards to capital management, a couple of comments there. We saw a further reduction in debt levels and improved debt rate ratios, obviously very pleasing for us. And we've decided to declare a first interim dividend which demonstrate our board's confidence in the group's cash generating ability. Just need to have a look at our medium term medium term target. Specifically the the metrics that we focus on being revenue growth operating profit margin, and the return on equity. Owing to the weaker performance of our international segment, the group did not achieve its targeted performance for the period.

Although we came very close on in in the regional segment we'll also make some further comment in my presentation. So if if you just look at the medium target for revenue growth, obviously, what we've set ourselves with GDP growth plus CPI plus 2%, which adds up to the 7.1%. We managed to achieve 3.5%, and in the prior period, 3.2%. Although, as I might mention, we exceeded that target with regards to revenue growth in the regional segment. From operating profit margin perspective, we got our medium term target of 10%. We managed to achieve 8.5% against the the prior year of 10.2%, came very close in the regional segment. Being 9.8%, although the international segment only managed to get to a breakeven. With regards to return on equity, our target is to beat our WACC by 2%, which adds up to 15.7%. We managed to achieve 14.8% against a prior period of 15.7%. Thank you, Tian, who will cover the financial part before I move over to the trade reviews. Good morning, everybody. [indiscernible] accounted for 80% of of group revenue for the month until in March 2025. Group revenue over that period grew by 3.5% to just more than R4,000,000,000.

The the main driver was regional revenue, which grew by 10.6% to R3,500,000,000. That was the result of strong volume recovery, in both [indiscernible] long life, but in particular, in long life. The original percent like I've indicated, which is it's more than the historic average The national level revenue, on the other end, declined by 17.2% to R500,000,000 due to the lower volume shift in the in the period. There wasn't margin on on our growth [indiscernible] Mark pressure on our gross profit margin, with the gross profit that just sort of a billion rand. Being in line with that of the prior year. The benefit of an improved regional growth profit margin was unfortunately diluted by the impact of a lower international gross profit margin. The regional profit margin that's operating profit month, If you remind us earlier, during the period, while the international net operating profit margin reduced the the the the group operating profit margin. The recent operating profit increased by 4.9% to R343,000,000 with the margin 20 basis points lower at 9.8%. [indiscernible] declined by 73,000,000 and it was 700,000 million million. Rand for us. R700,000. Apologies. For the period. With the margin declining from 11.5% to 0.1% for the period.

This was due to lower revenue, and, obviously, also pressure on on the gross profit margin. The group operating profit was 1913.9% lower at R343,000,000, and the operating profit margin, a 70 basis points lower at 8.5%. Earnings was impacted by the the weaker international performance. EBITDA was 8.8% lower than the prior period, and the margin also a 70 basis points lower. Than the prior period. Headline earnings declined by 11.9% to R231,000,000 for that period, and, accordingly, [indiscernible] by 11.9% to 88.7¢. [indiscernible] was 12.3% lower at 87.5¢ despite the the the the the pressure on on on [indiscernible] [indiscernible] Efficiently during the the period. With net working capital R52,000,000 than the corresponding period. Inventory levels were down by R25,000,000, [indiscernible] accounts receivable increased by a hundred and R53,000,000. It was offset by a hundred and R18,000,000 increase in accounts payable, which obviously contributed to the level networking capital. [indiscernible] generated from operations increased, therefore, by R248,000,000 Get it? And capital expenditure amounted to a hundred and R68,000,000, which was lower than the R200,000,000. Spent in the corresponding period. [indiscernible] to the division was a result of repayment of long term loans the value of hundred and R6,000,000 debt levels [indiscernible] by 29.8% or R349,000,000 to 821,000,000 of March 2025.

The net date to equity ratio improved from 33.3% the prior period to 22%. And the net net will EBITDA ratio improved from 2.1 times to 1.6 times. The board declared the first interim debit then sends the listing of of of this company on the [indiscernible] going forward to pay interim and final dividends. The first interim dividend amounts to 29.6¢ per share. And that is based on a cover of three times airline managed per share. The intention is that the final dividend will will then be still equal to two times Atlantic's per share cover which will be calculated on the three year logs. Group revenue grew by compound annual growth rate of 9.2% over the past five interim reporting period. [indiscernible] Revenue driver for the current period was volume which grew by 6.3% negative mix contribution of 1%, price inflation of 1.4%, and also currency making a negative point 4% contribution. The breakdown of the revenue grew the last three I think it's or three reporting periods. Firstly, what's what's what's and that is the first half of twenty twenty four, there was negative volume growth of 6.1%. That is turned around to the current 6.3% volume growth.

In terms of selling price, inflation, there was 6.9% inflation in the h one of twenty twenty four. That is gone back gone to deflation of 3.5% in the second half of twenty twenty four? And but that's also starting to turn [indiscernible] we see 1.4% price selling price deflation in the first half of the current year. That all added up to the 3.5% revenue growth for the current period. In terms of an analysis of the vessel, importantly, is is is the impact of of foreign exchange rates on that? As we can see in the top right hand corner, the impact on on revenue international revenues for the six months period where it was a hundred and R53,000,000 in the second half of twenty twenty three. That is started to decline from there on. In the current year, it was a negative R16,000,000. Due to a stronger rand exchange rate. The average exchange rates reflect that trend. At the bottom right of of the slide. And in terms of the mix of currencies, No significant change except for [indiscernible] where you've gone from 30% in the prior period to current 15% and increased in US dollar And before 02/1966 the same.

Operating profit, annual growth rate of 12.3%. That compares to the 9.2% on on group revenue. In terms of working capital, working capital revenue and and the end of first offer. Five was fifteen. 2.4%. It's showing improvement. From the [indiscernible] And in terms of working capital days, five days lower. This time around, and the big driver of that is is the inventory where the days have [indiscernible] [indiscernible] the same days for the current reporting period [indiscernible] offset one another. [indiscernible] accounts receivable and accounts payable those were impacted by the timing of our month end, which was on the March 30 That's which only helped to improve the situation. Free cash flow generated for the period on the back of the the good net working capital situation. Increased to R343,000,000 for the period compared to R5,000,000 for the for the first half. Of 2024. Income tax payment is significantly more than hundred and 36,000,000 in the current period. And maintenance capital So that'll all contributed to free cash flow of R61,000,000 for the current period versus a outflow of hundred and R99,000,000 the prior period. Utilization of of of cash in the business the biggest outflow was for for dividends that were paid in January.

R291,000,000, expansion CapEx The R4,000,000 traded shares that were purchased on market in terms of trade plan or long term incentive in the group. Then settlements for shares divested in December, The business had to purchase on on market shares the value of R70,000,000 for that. The net repayment of loans these payments, all contributed to a working cap capital requirement of R502,000,000, which was funded by Wayne an increase in [indiscernible] The capital structure of the group continues to improve as can be seen from from the graph on the screen. So [indiscernible] the the the decline in in debt from h one to h two illustrated there. Obviously, to seasonality. This situation is almost better here in due to lower working capital in the business at at the breakdown of the total date, as you've seen previous reported periods, long term date is is is [indiscernible] And we use bad overdrafts to fund the the working capital requirement during the first half. Beginning of the second half of the year. Starting with the net bank overdraft of R581,000,000, at the end of the current period compared to R7,740,000,000 at the end of the prior period. The bank loan repayment profile remains the same, with R93,000,000 of long term loans due for repayments in the second half.

Of the current year. Which will result in R62,000,000 bank loans outstanding at the end of the current financial year. Thank you, Peter. Thank you very much, Tian.

I will then cover the the trading review To start with regards to segmental revenue, Jan, can you just move on to the next slide, please? If you look at segmental revenue, a very important slide for us from a strategic perspective, where we look at the revenue contribution by segment. You would have seen the international division being 16% and being diluted to 13%, which is stated intent of us from a strategic perspective to grow our regional business faster than the international business. We're not saying we want to sell less into the international markets, but we wanted to drive specifically revenue in the regional segment to focus on taking out some of the cyclicality that we've seen within this this division. Just if you look at the specifically from a regional perspective, this is summary there of our market offering. Where we, have got our own brands and also private label ranges. For major domestic retailers. Then just going a bit into the detail with regards to private label, As mentioned previously, part of our strategy is that we will have a deal strategy towards growing our branded portfolio, manufacturing private labor ranges for major retailers would have seen an increase in branded products, due to production innovation drive mainly in the fruit juice and spices and seasoning, cat categories.

Just going into a bit of detail with regards to regional, You will have seen a a very pleasing 7.6% increase in revenue if compared to the prior period, where we've seen in long life foods, revenue up 7.22%, if you look at fresh foods, up 8.3%, beating our targets that we've set ourselves. So I think that was really a good performance. And operate profit increasing by 4.9%, getting to a operating profit margin of 9.8%, just shy of the 10% goal that we've set ourselves. Interesting to note, if you look at the revenue and operating profit, over the prior period, seen a CAGR of 9.5% with regards to revenue. And operating profit increasing by 12.2% which was a pleasing is is a pleasing performance. Just a couple of comments with regards to the increase in revenue. Very pleasing to see the volume change of 9.59.9% where we saw some mix of minus 1.7%, and the price deflation of point 6%. What can clearly be seen there is that we managed to to get revenue growth with drive in volumes mainly, and where we had invested in price to support our volume growth. But that was achieved also in the backdrop of good management of costs and also operational leverage due to the volume change.

Just a couple of comments on on on specific categories in our food users category. One of our status intent is to grow continue to grow our food users. So we've seen some strong double digit revenue growth Our volume growth was supported. Our margins due to the operational leverage that we achieved, We saw some market share gains in this competitive category. And our growth was mainly driven by the launch of our fruit nectar deuce range in 2024 And you would also see now in store, we've launched a limited edition winter juice range, to support, our brand and also our revenue. If you then look at canned meat, brand equity as Blue Brand continue to gain brand share. Our volumes were impacted by high input cost recovery. And consumer pushback on price increases. We saw some high levels of promotion in the canned protein meals category. We saw some investment in price that we had to make which negatively affected profitability. But on the positive side, we've invested in new equipment, which supported some efficiency gains, and there is some more equipment that we're busy installing. We'll start to install next week to continue our drive, to support efficiency gains.

With regards to that part of our business. If you look at canned fruit and vegetables, we saw some market share gains in canned fruit. But we do continue to see that the climate patterns causes increased volatility, increases cost, and it disrupts supply. Looking at herbs and spices, also an excellent performance which where our growth was supported by new product launches. Including our spice shaker range that we launched in 2024, and a new product development with regards to salad dressing mix range and also an extension of our seasoning range. Pies and pastries, continue to see some good volume growth supported by margins, We still continue to also see that our that the pie offering is good value. In these difficult economic times. We've also seen some ongoing newness in Magpie, Mama's, and Big Jack brands. And today continue to demand a commanding market share position. We also saw some increased efficiencies with investments in new technology. Our ready meal business is really a fantastic business for us, and the and the con continued resilience of high income income consumer supported that specific category. Growth was also driven by high levels new product innovation and upgrades for Hooly's.

Where you've got an excellent partnership and we all also continue to invest in in capital that benefited efficiencies and also quality improvements. With regards to the rest of Africa, we did some skew rationalization, which supported the efficiency gains, and diligent price volume and margin management supported and improved profitability. These are this, some pictures of new product, innovation with regards to the, specifically the winter juice range that you see on on on on your screen. Also, launch of, Roach quality power smoothies. In the snacking category, then you see the launch of the Heinz spices [indiscernible] Extension of our iron spices seasoning range, well as extension of our blue brand mint range. Some product innovation with regards to pies. Extension of our mama's pies range in into a new full pack and also some refresh on the packaging design for our Big Jack pies. Some private label new product development. You can see some specific new development with regards to James in Woodridge. And also some peach slices of and fruit cocktail in Pick n Pay.

Some further development in our Woolies products, where you see some cheeses and also some yogurts. Then just a couple of comments on market share. I think specifically, pleasing to see our fruit juice market share was boosted by the launch of our fruit nectar juice range. So if we look at the positionings that we still got, number one in jam, number one in cane fruit, number two in canned veg, number one in canned meat and meals, and number two in long life food juices where we managed to increase our share just over 30%. If you look at our specific specifically with regards to branches, Blue brand intends this number one position with some share gains that we've seen. Number two position in jam, cane fruit, and vegetables. And commanding number one position in canned tomato. And also, as I might mention, in corn meat with a bull brand being a solid number one. Also, our root road fruit juice gained shares in the competitive category within a % where our position is number two. Infant meals number two. Spices, herbs, and pepper. Getting north of of 10% being a number two. And then in retail frozen pies and then recent frozen pastries, We are also got a fantastic market position of number one.

If I go into the international division, just to look at our market offering, so we are long term to global retail and premium branded customers. And then you will just see a breakdown of our international revenue by region. I'm sure there will also be a couple of comments with regards to the to The USA market. We we've seen and also put in our commentary that increase prior year period of 16%, an increase to 24% for h one. Just a bit more detail with regards to international performance. Dion made mention of the revenue of just over ZAR500 million a decline of 17.2% against the prior period. Also a decline in operating profit of 72,000,000 prior year making an operating margin of 11.5% and only managed to achieve a breakeven result for the period under review. If you look at the revenue in the past number of years, CAGR of 7% you would have seen operating profits being similar in h one of '23 and '24, but unfortunately, a breakeven in h one 2025. Just a couple of comments with regards to the specific two factories that we that we manufacture and and sell our products. So in the deciduous food product category, we've seen extremely difficult market conditions due to high levels in the international markets.

Several canned deciduous food contracts, not honored by our customers, specifically in the Far East, and we had to redirect those products to alternative markets at lower prices which then negatively impacted our our profitability. Resultant shipping delays as new customers secured, were secured, and we also see some lower pricing on fruit puries. And Tian also made comment of the rand strength against the prior year. If you look at our pineapple category, we saw some lower pineapple volumes due to the drought conditions in 2024, which which where we saw some lower quality fruit and yields, which resulted in pineapple canned pineapple shortages where we've seen poor size distribution with less large sized fruit. Recovery in food quality is taking longer than expected, in certain growing areas due to the drought conditions in the prior year. We have received adequate rainfall in the last five months. If we also look at the international market with regards to pineapples, we've seen a vast decline also in other producing countries mainly in Thailand. So if I just go to our strategic focus areas and make a couple of comments on our strategy and outlook. Looking at our progress against strategic priorities outlined for our 2025 financial year, So we got a couple of strategic focus areas.

We'll continue to to deliver against medium term term top target product targets that we've set ourselves although not achieved in in in h one, it we still are comfortable that those targets are reachable for us. In the in in in the short to medium term.

With regards to focus on fruit juice, dry foods, pies, and ready meals, those are specifically our categories that we foresee to continue to get some volume revenue and revenue growth and increase market shares. We will continue to drive innovation through new product development, as we've seen this as a as a massive driver for growth We've done exceptionally well. We've seen in the regional segment more than 10% in the last in the in the First Half Of This Financial Year, We Achieved From New Product Development. We Will Increase Our Innovation In Our Protein Meals Category You've Seen The The Latest Release Of Another Product In The In The Men's Range. And Then We Will Evaluate New Product Categories Which We're Currently Working On. You've Also Seen Our New Power Smoothies That We've Put Out In The Marketplace As Part Of A Snacking Opportunity. Will Continue To Maximize Our Opportunity In Our Food Crops Food Cups Internationally, As It Differentiates Ourselves, And We've Seen Some Good Growth In The US market. Factory efficiencies will be continued to be supported by capital investment I've made mention several times of, the improvement in quality. And also inevitably when you replace equipment, you also get some capacity improvements.

Our vertical integration in our regional business is working exceptionally well and I and it was well executed at a pure regional concentrate plants and support our juice business as well as as our baby food and jam categories. We will continue to identify potential bolt on acquisition We have evaluated some in h one, we didn't find any suitable acquisition target that was of a nature. That was of interest. Just a couple of comments on The USA trade tariffs. As we all know, it's an important day today where our president has got a meeting later this afternoon with the president of The United States. Apparently, we export to The USA accounts for in the region of 24% of our international revenue in h one, which adds up if you make the calc to about a hundred and 25,000,000 We foresee that for the full financial year, we will be in the region of 400,000,000 of our revenue. We'll move towards The United States. Inventory not sold in the Far East was directed to meet The US demand, Unfortunately, the higher trade tariffs a significant risk to the profitability. As I might mention about 400,000,000 revenue, we foresee for the financial this financial year to to be sold into The US.

While it's a bit early for us to speculate on the potential impact, our commercial teams are currently engaging with our US customers on the post tariff trading terms We continue, obviously, to ship as quickly as possible. Our products into those markets. We will, as I might mention, continue to try our best to ship as quickly as as we can.

Then obviously, shoe products become uncompetitive due to higher tariffs, The US bound in Invertee will need to be redirected to other markets. Just a couple of comments on the outlook. I think the global uncertainty and local instability impacts our South Africa's micro macroeconomic outlook. And slowing the country's recovery declining confidence amid global and local uncertainty, and we continue to see pressure on consumer spending for longer. There's some specific comments on the regional segment. We expect our trading momentum to continue in H2 We will focus on brand share growth which will be driven by product innovation. We're looking to expand further into new product categories. And we we will manage our sales volume, gross profit margin, other operating cost to achieve our operating profit margin target of 10%. On the international segment, we will we we foresee that there will be pressure on volumes and prices due to slow slower global demand for specifically deciduous food products, So shipments of of our deciduous food products, we would see would accelerate in h two. With regards to pineapples, we see a recovery in the pineapple crop. But we foresee that it will take a bit longer than expected.

And will impact our performance for the remainder of the financial year. We do see that pricing specifically on pineapple products are currently extremely high, not only on canned products, only also in industrial products. So it's unfortunate that we struggle to get those yields on the farms, pricing is is is looking good. And we foresee that in the short to medium term that pricing will continue to stay high. So we are we are geared to handle the threat and impact impact of the high USA tariffs while proactively exploring emerging opportunities in other markets. Thank you very much. That is the presentation from Tian and myself, and we will gladly answer any questions. You. Alright, Peter. The first question we have is from Marie Moore from Alich and Co, and he asks if you could please elaborate on the changes being seen in the canned meat category. Is this due Oceana entering the category or due to other reasons?

Yeah. I think there's a couple of reasons. Thank you for the question. I think there's a couple of reasons, obviously. Oceana did enter the category. And if there's competition, that always puts pressure on on on on pricing. With regards to regards to volumes. But I don't think the competition is is the only reason. I think there is a reason that the consumer is cash strapped. We clearly see it when you when you pass a certain price point. That you see that volumes do decline. As we all know, specifically from a protein perspective, We know that the fishing industry has got a massive advantage from a VAT perspective where there's no vet on canned fish. Which makes it a lot more competitive product. And that directly also does compete against against our product range. We foresee that obviously, we've got a a good market share with regards to our Blue Brand product. We've extended into into other also into the the meals range range with regards to that. I think with the efficiency gains that we will experience, we will be extremely cost effective. We also know our competitors' factory is based in the Western Cape.

Our factory is based in the Johannesburg market, which is a lot closer to the bigger bigger markets in in South Africa. So, yes, it's not only from a comp perspective, but also from a pricing perspective. Where we have seen some from pressure. And we had to drop prices to ensure that we get volumes moving again. It still continues to be a a a product that's well in demand. There's a certain price. That are that the consumers are prepared to pay. Thanks, Peter. Then if few questions on international and international performance.

First is from Stuart Bradbury from Nedbank commercial banking. And Stewart asks whether the international customers that did not honor contracts provide reasons for them not honoring these contracts. And the high international stock levels any insights on reasons for these high levels?

Yeah.

Thank you, Stuart. Just, two comments. A lot of our products and I'm gonna make a bit of a story about this to give you the the insight. If you look at the specifically our Far East markets and and and specifically China, they used to use our products specifically to decorate cakes So it was a big seller into those markets and bought mainly by the bakeries. And when COVID came, obviously, the bakeries had to close down. And that was when our decline in our sales to those markets actually started. We all know that the Eastern markets, specifically China, the product looks very different to ours. It's a much more pale product if you compare it to to our rich color, that orange color, and the firmness of our our our peaches are a lot better than those than than the Chinese. So our product continues to be a preferred product. But if you look at China, as we all know, a very difficult place to compete from a cost perspective. So their costs are probably at the index of 60% towards our products. Which makes it obviously from a competitiveness perspective, makes it very difficult to compete with them.

And over time, after the COVID period, we've seen a slow decline where they've used different fruit to decorate the cakes, and so we've got limited volumes that we currently shift into those markets. So it was just a a comment with regards to less demand. For our specific product. Mainly due to not being price competitive in the marketplace. So I think that that covers that. Question. With regards to the comment on on international stocks in the in in in in in in in the world. We've clearly seen that, obviously, after the Greek crop failure three years ago, they are on full production again. So there is, again, currently stock in the system. We've also seen it from a from a purity perspective where specifically in that in in Chile, in the South American markets, where there was also a bit of a decline from a consumption perspective, and then a lot of product moved into the puri into puri. So we do see currently is gonna be in the medium to short term. We foresee pressure on volumes with regards to stock high stock levels. And we will have to see how the crop looks in that probably will know in about two months time how will the crop look in, in, in Europe?

We've recently heard with regards to apricots that there was a bit of frost, so which means that crops were down.

We haven't got all the insight into peaches as yet. But we will know that in the next in the next two months. But, yes, currently, there is a pressure on on on stocks.

Peter, there's a related question from Marie Moore from Eilett. Are you able to get any compensation from Far East customers? For reneging on their contracts?

Yeah. You know, it's extremely difficult. I I don't think anybody would like to go and litigate in in any of those in any of those countries. So at the end of the day, although they they might take some of their their products over a period of time, but inevitably, what happens is is that you shift the products to other one to other markets.

Thanks, Peter. Then some questions from Nick Wilson from News twenty four. On the international business and the likelihood of tariffs being increased in The USA. How concerned is RFG about potentially punitive tariffs coming out of The USA? And are you concerned about the possibility of a goer coming to an end?

Yeah. I think I think a very good question. Obviously, we've made mention we are concerned about it. Because if you look at the specific on the deciduous if I just break it down into the three categories of products that we're selling to those markets, The first product is bears. Where it falls under Agawa, where it's currently duty free. If we just compare it to a a country like Greece, for instance, there is a a 17% duty on them and even a higher duty from from China. So there's a a big advantage for us. With regards to pay specifically. You then look at peaches, on peaches, there's also we do have a duty on peach of 17%. And and and, obviously, we've also and we've got a duty on food cocktail of 15%. Me, at the end of the day, it's all relative towards your competitors into those markets. And you need to to understand that with regards to how competitive will you be, if you compare yourself relatively to the other competitors which are the Chinese as well as the Greeks. So there's also duties that's that's that's going their way. But, obviously, we'll have to see where everything ends up.

From Europe, we've seen that there's a blanket duty, I think, 20%. In South Africa country, there's that blanket duty for the rest of the world. That's 10%.

So let let's see how that pans out, but that's one side of the coin. The other side is what happens if your product becomes too expensive in the marketplace. So if duty drives inflation, it it inevitably means that volumes might drop. So, yeah, we are worried about the American market. We've I've made mention of the magnitude of it. And we'd have to see what the future holds with regards to that. But as I might mention, it's all relative towards our other competitors in the marketplace.

Peter, then a question from Lumpilo Gobo at business day. How much longer do you expect the pineapple crop recovery to take? Relative to your initial expectations? And what specific actions are being taken to mitigate the ongoing impact of the pineapple shortage on your operations.

Yeah.

Yeah. Foresee that, it will happen. I've spoken about medium short to medium term. That means twelve twelve to eighteen months. We have got two specific areas that we farm. In Eswatini. One area has got different soil than the other area, One is Melkerns, and one is in Spofaneni, and they of a similar size of nature. We've seen some good improvement, specifically in the Malcone side, which is a more clay soil. A different soil. And there we've seen some some good improvement. We we we foresee that from June, we will we will see plant crop. We've got the tune and plant crops in that that business. So we'll see plant crop, which is the the biggest size fruit where your fruit distribution is better. I made mention of that. You want to have number one and number two fruit, which are the biggest sizes. Obviously, which gives you the tonnages and the better quality. And so on the Milkern size, on 50% of it, I I foresee that that looks a lot better. And will recover earlier on the Spofaneini side, which is a more sandy soil. We have increased a couple of of of mitigating steps that we've taken.

We've increased the the time that we harvest, the cycle time. Which we took from four to five years, In Malcoge, we are on five years, and we it's it was a new farm that we developed as you would recall. We got initially got extremely good yields on those on that farm, but it's a lot more sandy, as I might mention. So I think from a drought perspective, we foresee that it's gonna take a bit longer to recover. We also irrigate there. A river next door to to to add on to on to to your rainfall. So we've also using consultants to support us specifically on soil health to ensure that we that we got all the nutrients in it. So, yes, there's a lot of a lot of actions that we're currently taking to ensure that we that we increase our yields. I foresee that that's gonna take a bit longer on that side. Than at the Milkern side.

Thanks, Peter. And another question from Nompila from Business Day. What types of emerging opportunities are you currently exploring in light of global trade challenges?

Yeah. I think think if you look at at at at at other places in the world where we can send our product to you if I understand the question correctly. I think there'll be opportunities in Europe to sell our products to and also into other countries Far Eastern countries, excluding excluding China. I think there'll be opportunities there to move product into those into those countries.

Then there's a question from Peter Kromberg from Merger Market. Will expansion into new categories be through acquisitions? What acquisitions are currently of interest?

Yeah. I think we always follow a combination of of and when we look at these I think I've previously made mention one of our competitive advantages that we've got is we operate in, I think, 14 different got 14 different facilities, and we operate in in 14 to 16 different categories. So we've got a lot of experience not only in in paper packaging, but in glass packaging, in in in in in fresh food packaging, in in canned cans. So I think we've got a lot of in in in in different equipment. And I think there's not a lot of lot of products in food that we will not be able to pack and that we understand. Although we don't have necessarily the correct equipment for it. I think we understand those categories fairly well. Or we understand the equipment fairly well. Sorry. And think they we will continue to look at maybe in certain categories that we see potential in. That we would we would start and do it ourselves from scratch. We all know that it's extremely difficult with regards to the competition commission to buy any other, specific, businesses nowadays. Because of of of of of everything that we need to adhere to.

And then we had to look at certain other categories you know, if the if it's not a a sizable business, it makes it difficult for us to operate. We we always like to have to buy businesses that's got a top line of at least R500,000,000. For the reason of you can put in good management and it's it's sizable. Because the time you take small acquisitions and smaller categories is is exactly the same as the bigger ones. So, yes, I think there there'll always be we'll always look at opportunities, but we're also not scared to say that we've got the ability to to drive categories from scratch. And and enter those. We've seen also that in in categories that we all like, an example, our juice business where we where we've launched our roads nectar range within the juice category, We also see opportunity within categories that we operate in that is some opportunities for us within those. To drive growth.

Thanks, Peter. A question from Talia Ginsberg from Mtombo Wealth. Do you have any plans going forward to change your export strategy? It seems you are getting squeezed both from the Far East and the Far West.

Yeah. I think a comment in that regard, which I made, which is our intent is to is to not necessarily pack less product, but to to make it a smaller part of our of the bigger business. And drive our regional segment faster. Obviously, we're busy with the really looking at at our international business from a sales perspective because we need to react. And we and and and quickly and see what the result is with regards to the The US market. And, we'll have to shift products to other markets. As we all know that 85% of our revenue is export in those in that in that part of our business. So it will be important for us to ensure that we that we identify other markets and move it towards them. I think we must just understand from a bigger picture perspective We're still very small in the in if you look at the and in pineapples, we're still very small. If you look at the at the total market that's available. So I think there will be opportunities for us to move our products into other market, But I think the important one there also is to ensure that we keep our profitability.

Into into those markets if we move our products.

Thanks, Peter. Then next two questions for Tian. And the first is from Murray Moir. Why the decrease in dividend payout ratio from 50% back down to 33%?

Yeah. It's it's not not really a [indiscernible] We've decided that for the interim we'll we'll work on a 33% payout, and that's after taking into account and to align it better with the seasonality of the cash flow in the business. We all know that this time of the year is when we our working capital and our [indiscernible] [indiscernible] So and the intention is to adhere it based on on on the on the final results of the year to to to increase the dividend to effectively for the for the full years, it's so it's just a bit of a spread. Of of of how and when we pay them to deliver.

Thanks, John. A question from Simon Sylvester from Resco. Can you give some details on the slightly higher growth in the period of other operating costs? As well as any guidance on this going into the year end.

Yeah. There's a there's a few areas that I'll I'll talk to two of those, the two biggest areas. And the one the first one is is marketing and promotion that's below the line advertisements, etcetera. So we had with the new product launches, had to increase our our spend to support those launches. And and also an attempt to to [indiscernible] volume growth, we we increased our spent in that area. And the second one is is in terms of the cost of as in staff cost. There's a slight increase, which is once of cost, so to speak, that that once off increase, and that's to do with settlements or in terms of the shared plan or the long term incentive scheme that was in place and that was basically a result of much improved performance in in the 2020 financial year. Relative to what the interest fair value of those awards was. So that that's also the marketing spend I foresee will continue. We you know, obviously, in these difficult times, what's gonna gotta continue with with your marketing efforts to to initiate [indiscernible] which is important for us.

Thanks, Dion. Peter, then there's a question from another question from Murray Moir. Are you increased volumes to checkers in your fresh business? Yeah. I think can you maybe just clarify the question? Because we don't sell specifically obviously, ready meals. We don't sell ready meals into Checkers. So can you just maybe elaborate on the detail of that question? What he specifically means by that on from a fresh perspective.

Thanks, Murray. If you wouldn't mind just updating that question and posting it again. Thanks. Peter, a question from Talia Ginsberg. Can you elaborate on what you export to China and what you use the fruit for? They use the fruit for? I think you have covered that part of that in a in previous answer.

Yeah. I think as I said, as I might mention, not going into specific details in that regard, but, I mean, it's been it's substantially lower than it used to be ten years ago.

The volumes that we currently move into into China for the reasons that I've specifically made mention.

Right. Then there's a question from, from Visio Fund Management. What are your CapEx plans for h two? And h one of 2026?

And second part of that question, how much capacity do you still have across your lines?

Yeah. Maybe you can cover the first one. I will cover the second one. In in our [indiscernible] we mentioned that we estimate CapEx for the full year to be around R430,000,000. We spent hundred and 60 odd million I'm not mistaken in the first half, which means there's a there's a lot to come if you just do the maths. But there's some substantial projects included in in in that estimate. And where we when we buy substantial pieces of equipment, which are often imported, And payment terms is always higher, like, down payment, but it'd be big portion of the payment shipment of of of the equipment. So there's a few that we've [indiscernible] fourteen hour plan for the second half of the year, but as as you can yeah. It's it's it's a bit of a a timing thing, so we those are delayed, it may well go into the next financial year, which will obviously reduce the 430 mil for for the current year, but will increase [indiscernible] In terms of next year, normally, we for our size business, we estimate that we should spend about R350,000,000 on CapEx. [indiscernible] [indiscernible] But we've got a few big projects on the go, like for example, in the juice plant.

There's there's one big project, and there's a there's a there's a number [indiscernible] [indiscernible] So those will run until next year. But in total, I think for next year, anything between [indiscernible] Yeah. Thank you, Tianan. And to cover the the the question with regards to capacities available. You would also see in our integrated report where we actually go where we go plant specific and and and comment there on capacities available. But as a quick help, I mean, if you look at last year, h one, you saw a volume decline, and you were seeing an increase of volumes of 9.9% for the six months. So the net effect of that is is is still single digit volume growth that we experienced. So it will be very much in line with what we've got in integrated report. I think we've got fair capacity available in most of the categories. And as I said, inevitably, when you replace also equipment, you tend to get a bit of capacity gain. Tianma had mentioned on specific [indiscernible] Although we know that the cat the the segment is under pressure, we need to replace certain equipment, and we're doing that. And but it will also support efficiency gains.

We know that in the short to medium term, it's gonna be the deciduous parts business specifically is gonna be under pressure. And we know that we will have to be extremely competitive from a cost perspective there. So our investments that we've made in the prior cup previous couple of years and that we will do for the next season coming up will will support us from a cost perspective to ensure that we as cost efficient and effective as we can be. As we foresee that, that we the the segment will be under pressure.

Peter, then we've got a question that's coming from. Sorry. Picking up on the issue of the product that was redirected from the Far East to new customers. He asks whether the new customers absorbed the whole volume and what is the margin impact of this contract being given that RFG is on the back foot in these negotiations?

Yeah. I'm gonna ask Dan maybe to help me Yeah. We've managed to find out for for the for the inventory. It's now just a matter of of of getting the the the product out onto this with them to the to the [indiscernible] customers It is a lot of it goes is planned for The USA. And we've received notice yesterday that there's now always been adjusting [indiscernible] This was going to the US due to the increase in demand. Obviously, it's due to the ninety days grace period that that we got before the higher tariffs becomes effective. So it as much as possible. And and the customers product update before that period ends, But yeah. So I'm still all of it, but we've we've said now at at lower prices. It is where we on some of the products in China, we got [indiscernible] We we we always knew that in the rest of the world, we won't achieve the same pricing, and we comes at lower pricing. And, obviously, pressure on margins, that's that's the main reason why the international you know, gross profit down from prior years is that we had to to sell these products [indiscernible] markets at at lower prices.

Thanks, John. So, there's a question from Simon Sylvester from Resco. He asks if you could please update on the port logistics performance. Are bottlenecks having any impact anymore?

Yeah. I think, in general, I think there's been an increase in efficiencies in the ports. But that's a general comment. And I this morning, what we've what we've heard is a lot of pressure on the system with regards to everybody as you could think. Would like to export their products as quickly as they can within this grace period. Of ninety days. Would like to to to to sell into The US. So think there's currently there's gonna be pressure. And we see it. To get vessels that that can ship your product into the into The US market due to everybody. Who would like to ship their products as quickly as possible. [indiscernible] further questions on the webcast.

Thank you, Graham.

People feeling like the light has just come. We must never stop the way. [indiscernible] The birds have just begun. We will always take a step