Tiger Brands “disappointed investors with a 4% fall in full year profit,” says Fin24
. This is due to “losses at its recently acquired Nigerian business”.
The food producer, which “makes bread, breakfast cereal and energy drinks,” posted diluted headline earnings per share of 1,584c for the year, adds Fin24
. That’s down from 1,654c reported last year.
Tiger Brands said “net income fell 5.5% to R2.6 billion, reports Bloomberg
. Revenue grew “19% to R27 billion”. Earnings per share, excluding one-time items, fell 3.8% to 1,624c.
That’s is less than a survey by Bloomberg
indicated. A survey of eight economists gave a median estimate of 1,716c.
Tiger Brands’ Nigerian business dragged results down
Tiger Brands recently acquired a controlling stake of 63.35% in Dangote Flour Mills of Nigeria last year, says BDLive
. If the poor performance of Dangote wasn’t included in the results, headline earnings per share would have risen “5.4% to 1,781c”.
The Nigerian business “suffered a R389 million operating loss,” reports Fin24
. This is down to “bad debts provisions, as well as once-off job cuts”.
Tiger Brands said that Dangote will “take two to three years to fully align … to Tiger Brands standards,” notes BDLive
. And in this period “to deliver acceptable returns”.
The news sent Tiger Brands’ shares falling, notes IOL
. Earlier today, they were down over 5%.
At time of writing, the share price has recovered some of earlier losses, with it trading down 3.08% at R300.46.
Time will tell if Tiger Brands turns Dangote around as it envisages.