Dairy products group Clover Industries warned shareholders on February 21 it expected to report on Wednesday that headline earnings per share (HEPS) for the six months to end-December decreased by up to 17%. The results should also shed light on Clover’s plan to separate itself into low- and high-margin divisions. Clover said in December it intended creating an independent buyer, Dairy Farmers of SA (DFSA), to address the "misconceptions" of milk suppliers that it was setting prices unfairly low. "DFSA will determine the price at which it purchases raw milk from producers as well as the price at which it sells raw milk to third parties. Importantly, DFSA will be entitled to sell raw milk to parties other than Clover. This will result in the price of raw milk being unequivocally driven by market forces," Clover said. Unbundling DFSA would reduce Clover’s annual turnover by about R1.75bn, but it should be able to recoup lost profits from fees charged to the separated company, it said....
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