Tiger Brands claws back some earnings

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Tiger Brands claws back some earnings

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Published Date: 2020-11-03 | Source: Stephen Gunnion | Author: Stephen Gunnion

Tiger Brands claws back some earnings

The company says its operating performance was better than expected towards the end of the year, with few supply chain disruptions.

Tiger Brands' full-year loss will be slightly smaller than it previously warned after the second half of its financial year panned out a little better than expected.

In an updated trading statement, the fast-moving consumer goods group said its operating performance had improved recently, with virtually no disruption to its supply chain in August and September as Covid-19 infections slowed significantly. Local demand for its products was also sustained, particularly for breakfast cereals, pasta, groceries and home care, while its Snacks & Treats division posted a marginal recovery. Improved performances were also achieved in Cameroon and other export markets, while costs and efficiency management improved in the final quarter of the period.

The company now expects to report a 65%-68% decline in earnings per share (EPS) from continuing operations while headline EPS will likely be 22%-25% down from last year. It previously forecast a 68%-71% slide in EPS and a 29%-33% drop in headline EPS. Continuing operations exclude Deli Foods in Nigeria, where it terminated operations last October, and the local Value-Added Meat Products (VAMP) operation, which has been sold.

In its August update, Tiger said an improved underlying performance in the second half of the year was offset by the impact of Covid-19-related costs. It also booked restructuring expenses of about R70 million as it tweaked its operating model. The decline in EPS relative to HEPS was largely due to the surplus of R2 billion arising from the fair value gain following the unbundling of its stake in Oceana Group in the previous financial year, including the capital profit it realised on the disposal of its residual shareholding in the fisheries group.

Following further assessments of the carrying value of its intangible assets and investments, it said it recognised an additional impairment of R43 million on an associate, which was also excluded from headline EPS.

Tiger's results for the year to end-September are scheduled for release on 20 November. Its shares rose 1.5% to R204.50 yesterday.





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