South Africa’s RCL Foods reported an annual loss on Monday reflecting the impact of Covid-19 and a 1.5 billion rand ($90 million) impairment on its assets, but pleased investors by announcing a dividend and indicating signs of recovery.

Shares in the Rainbow chicken and Selati sugar maker jumped 8.9% by 1023 GMT.

“The company reported a dividend and cash generation by operations, which the market was not expecting. The market remains optimistic about the next six months as the restaurant industry starts to slowly pick up,” said Ryan Woods, a trader with Cratos Capital.

RCL said the coronavirus pandemic, as well as a downgrade of South Africa’s sovereign credit rating, had necessitated an evaluation of the carrying value of its assets.

That led to it recognising a charge on property, plant and equipment, goodwill and trademarks, dragging its earnings per share into negative territory and resulting in a loss per share of 103 cents ($0.0620) for the year to June 30.

However, its headline earnings per share (HEPS) - the main profit measure in South Africa - totalled 13 cents for the year, down 65.7% on a year earlier.

HEPS strips out certain one-off items, and was not affected by the impairment charge, with the decline instead reflecting the impact of the pandemic and a strict government lockdown.

RCL, whose share price had fallen 23% this year by Friday’s close, said it incurred 266.8 million rand in costs relating directly to the impact of the coronavirus.

Annual revenue rose 7.4% to 27.8 billion rand, boosted by higher prices of sugar and an increase in revenue at subsidiary Vector Logistics.

RCL declared a final gross cash dividend of 10 cents per share, bringing the total dividend for the year to 25 cents per share.

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