Pioneer’s cost cuts pay off

File picture: Jim Young

File picture: Jim Young

Published Nov 21, 2016

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Johannesburg - South Africa's Pioneer Food Group reported a 36 percent rise in full-year profit on Monday on cost cutting, but it warned the impact of drought on maize prices will hit performance in the first half of the next financial year.

Pioneer, which makes foods such as maize meal, pasta and juices, said headline earnings per share rose to 904.3 cents in the year to end-September from 665.3 cents a year earlier.

Adjusted operating profit increased by 6 percent to R2.3 billion ($159 million), while revenue rose by 12 percent to R20.6 billion.

Capital expenditure for the year was R809 million from R652 million in 2015.

The company said its Essential foods division was impacted the most by wheat import duty, drought and exchange rate volatility, with profit contracting by 2 percent.

An El Nino weather pattern, which ended in May, triggered drought conditions across the region which hit the staple maize and other crops and dented economic growth.

“The precarious maize position and reduced raisin crop will impact performance in the 1st half of the new financial year, however we remain confident that Pioneer Foods can sustain the momentum of profitable top line growth for the full year,” the company said.

Pioneer declared a gross dividend of 260 cents per share, up 10 percent from 237 in 2015.

REUTERS

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