Pioneer Foods warned yesterday that the decline in soft commodity prices had not given rise to increased demand and volume growth.
The food producer’s share price shed as much as 6 percent after it announced that its headline earnings a share for the year to September were expected to grow by more than 20 percent, less than expected.
Eleven analysts polled by Reuters had expected earnings a share to rise by an average 32 percent. Shares closed 4.74 percent lower at R122.
Pioneer operates in the staple foods market and owns brands such as White Star super maize meal, Bokomo breakfast cereals and Sasko bread.
Pioneer said the trading environment continued to reflect the pedestrian food and beverage price growth rates, indicative of significant pressure on the South African consumer.
Consumers have been squeezed by the rise in costs of living including transport, rates and other necessities, as well as high indebtedness.
Revenue growth had been sustained at similar levels to the interim results for the six months to March, notwithstanding deflation in select categories, it said. The group’s performance was bolstered by contributions from export business and joint ventures.
Pioneer Foods was in the process of listing Quantum Food. It had said the listing was likely to be in the new financial year. – Nompumelelo Magwaza and Reuters