Tiger Brands reins in its drop in profit as disruptions fade
Group lowers expected fall in Heps to 30% from 40% previously forecast
Food producer Tiger Brands, owner of Tastic rice and Oros, says its expectations for full-year revenue and profit have improved since August, boosted by better-than-expected operating conditions and sustained demand for its products.
In an updated trading statement on Monday, Tiger Brands said it expects headline earnings per share (Heps) from total operations to decline by as much as 30% from the R13.22 it reported previously.
In August, the group had warned of an up to 40% fall for this measure of profitability, or about an R870m decline in headline earnings.
Headline earnings is a widely used profit measure in SA, and excludes certain one-off items.
There had been virtually no disruptions in Tiger Brands’ supply chain in August and September as Covid-19 infections slowed, with the group also reporting there had been sustained demand in SA for many of its products.
Tiger Brands said on Monday it has experienced sustained demand, particularly for its breakfast offerings, as well as pasta, groceries and home-care products. There was a marginal recovery for snacks and treats.
There has also been an improved performance in export markets, the statement reads.
Profitability benefited from improved cost and efficiency management in the last quarter, the group said, though despite this operating income for its second half of its 2020 year is likely to be lower than the same period in 2019.
The group recently announced the conclusion of the sale of its value-added meat products business, which was temporarily closed following a listeriosis outbreak in 2018.
Tiger Brands' share price on Monday gained 1.49% to R204.50, having fallen 2.95% so far in 2020.