(Adds details on results, background)
JOHANNESBURG, Nov 22 (Reuters) - South Africa's Tiger Brands
TBSJ.J posted a 17% drop in its annual earnings on Friday,
dented by ongoing margin compression across the grains
portfolio, lower sales in export markets and
slower-than-anticipated recovery of its processed meat business.
The country's leading food producer, with brands such as
Jungle Oats and Tastic rice, said its headline earnings per
share (HEPS) from continuing operations in the year ended Sept.
30 dropped to 1,349 cents from 1,633 cents last year.
HEPS is the main profit measure in South Africa and strips
out certain one-off items.
Full-year revenue from its Value Added Meat Products (VAMP)
business, which was temporarily closed last year following the
world's largest ever listeriosis outbreak, dived 39% to 654
million rand ($44.48 million), while the company also incurred
an operating loss of 547 million rand.
Listeriosis is a disease which causes flu-like symptoms,
nausea, diarrhea and infection of the blood stream and brain.
"Although there was steady improvement in VAMP's performance
since the reopening of the manufacturing facilities, the
second-half performance was below expectations," it said in a
statement.
The company is facing a class action lawsuit over its role
in the listeriosis outbreak that killed more than 200 people in
South Africa and was traced back to a factory run by Tiger
Brands-owned Enterprise Foods.
The South African food producer said it filed its plea in
August in response to the class action summons received earlier
this year, and will "continue to conduct its defence in a
responsible manner while remaining committed to the matter being
resolved as soon as possible." The group is exploring the sale of its processed meats
business after an internal review had concluded it was "not an
ideal fit" within the portfolio. In the grains portfolio, revenue increased by 4% to 13.2
billion rand, reflecting price inflation of 6%, while overall
volume declined by 2%, Tiger Brands said.
"Price inflation was insufficient to offset the impact of
higher input costs, with operating income declining by 24% to
1.4 billion rand," the food producer said.
The operating margin there consequently reduced to 10.9%
from 14.8%.
($1 = 14.7033 rand)