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JOHANNESBURG - Clover Industries said they faced a challenging year as the prolonged drought and rand volatility in the country were beyond their control.

The company on Tuesday announced its financial results for the year ended June 2017.

Revenue for the period improved by 2.4 percent to R10 billion. Revenue from sale of products increased by 3.3 percent to R9.4 billion due to higher selling prices which increased on average 6.8 percent while services rendered to principals contributed R641 million to revenue, a decline of 6.3 percent.

Johann Vorster, Clover Chief Executive, said: “The resultant above-inflation input costs, subdued volume growth and continued low consumer spending amidst aggressive competitor pricing meant that we had to take some very tough decisions during the year, to position and sustain the business optimally against a constrained “new reality”.

Read also:  Clover sees profit decline 

“We are confident that the measures implemented during this reporting period will not only ensure sustainability and growth during the current down cycle, but will position Clover optimally to take advantage of any economic tailwinds, once the economic tide has turned.”

Vorster said the decline was mainly attributable to the loss of major principal income in previous periods compounded by negative consumer sentiment and the liquidation of a recently signed principal.

“The overall decline was largely mitigated by recent new product launches albeit off a low base.”

Vorster said: “On the back of the tough market conditions, we focused on cost saving initiatives during the review period. The management team drove efficiencies and cost savings, especially on variable costs, exceptionally hard.

“A number of actions implemented in the latter part of the financial year such as the operational restructuring of DFSA, the launch of Project Sencillo, the ongoing roll-out of Masakhane, new product launches, and material changes to product recipes resulting in lower costs and sugar content have starting yielding encouraging results which should be reflected in the upcoming interim results and beyond.”