Pioneer boss to retire, adjusted earnings seen to rise

Published Oct 17, 2012

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Nompumelelo Magwaza

PIONEER Foods managing director André Hanekom would be retiring in March, the company said yesterday.

Hanekom has been with the food producer for 24 years, 19 years of which he was the chief executive.

Pioneer chairman KK Combi said: “We are facilitating a change in chief executive at this time to position the business appropriately for growth in years to come, as the economic environment improves and our investments in growth capacity come on stream.”

Hanekom will be available to the company until the end of March 2014 to ensure smooth transition.

Hanekom said: “I am grateful for what we’ve accomplished, establishing Pioneer Foods and developing the business to participate in key growth markets. The company is well-positioned with a talented divisional management to respond to the opportunities and challenges ahead.”

Pioneer also said yesterday that it expected earnings and headline earnings a share for the year to September to decline by 12 percent and 22 percent, from the corresponding period the year before.

The company said the earnings would be impacted by a charge relating to its empowerment transaction. The share-base charge in terms of IFRS 2 of R161 million relates to the implementation of the second phase of its broad-based black economic empowerment deal.

Adjusted earnings and adjusted headline earnings a share, excluding the phase two IFRS charge, are expected to increase by between naught and 10 percent, compared with the corresponding period in the previous year.

Pioneer said the comparative operational performance had also been impacted by the IFRS 2 share-based payment charge for the cash-settled phase one empowerment scheme, as a result of the share price movement in the respective reporting periods.

In the 2011 reporting period the share prices increased from R47.60 to R59 resulting in the charge in the income statement of R45m. In this period the share price declined from R59 to R53 resulting in a gain in the income statement of R36m.

In its trading statement last month, the company said that business was better than expected, with Sasko’s advanced notice of higher selling prices from July onwards contributing to increased sales volumes.

Bokomo benefited from growth in the breakfast cereals category.

In its trading statement in September for the eleven months to August, Pioneer said revenue increased by 10.5 percent to R16.7 billion, with volumes contracting by between 2 percent and 4 percent on the firm’s average product basket.

Pioneer said it experienced substantial increases in operating costs especially in electricity, payroll and transport costs.

Meanwhile, Ceres Beverages benefited from increased selling prices despite volumes remaining under pressure, the company said, adding that agricultural prices remained under strain at consistent volumes in feed, eggs and poultry.

Pioneer Foods stock advanced 2.83 percent to close at R54.50 yesterday.

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