Popular breakfast cereal Weet-Bix is just one of the top Pioneer Foods brands. Photo: Simphiwe Mbokazi/ANA

DURBAN - Pioneer Foods declined 6.67% on the JSE yesterday after the group said in its trading statement that it expected at least a 48% drop in headline earnings per share (Heps) for the year to end-September.

The shares closed 2.92percent lower at R114.55. The group said it expected its Heps to be between 398cents and 470c a share and this would represent a drop of between 48percent and 56percent as compared to 904c reported last year.

Pioneer Foods also expected a marginal decline in its revenue for the year. “Revenue decreased by between 4percent and 6percent from the R20.6billion in the comparative period due to a combination of deflation, volume declines and resistance to price increases,” the group said.

Pioneer Foods is a producer and distributor of branded food and beverage products to wholesalers, retailers and informal traders.

Its brand portfolio consists of Weet-Bix, Liquifruit, Ceres, Sasko, Safari, Spekko and White Star. In the update the group also stated that the unfavourable maize procurement position entered into in 2016 muted the performance of the maize category until June. Maize has since been milled at market-related cost.

Popular breakfast cereal Weet-Bix is just one of the top Pioneer Foods brands. Photo: Simphiwe Mbokazi/ANA

The group was hard-hit last year by the drought, which led to a decline in the agricultural sector in the country. The group has an exposure through its Essential Foods division, where it manufactures wheat and maize products.

But the group was bullish about its prospects in May and said it was expecting to show improvement in the year ahead. However, during the period the fruit export performance, given the shortage of raisin stock in the first half of the financial year, was further impacted by the lower US dollar prices realised and a stronger rand, it said.

The group’s bakery division has shown good progress during the period. “The balance of categories showed resilience during this difficult period. Bakeries sustained performance with the Aeroton bakery upgrade successfully commissioned in the second half of the fiscal year.

“Snacks and Treats delivered a stellar performance,” the group said. Pioneer Foods also noted the weak beverage exports experienced in key African markets in the first half and this continued through the latter half of the period.

Local beverages volumes and margins suffered from reduced year-on-year demand as well as increased competition,” it said. The group expects to release the results on or about November 20.