Tiger Brands Hurt as Weak Economy Adds to Listeriosis Crisis
(Bloomberg) -- Tiger Brands Ltd. earnings slumped as Africa’s biggest publicly traded packaged-food company suffered from weak consumer spending and the enforced shutdown of operations due to a deadly listeriosis outbreak.
- Headline earnings per share declined 26 percent to 15.87 rand in the year through September, while revenue fell 9 percent.
- Tiger Brands is seeking to emerge from the listeriosis crisis that overshadowed its business this year, forcing the company to temporarily close two factories and recall thousands of tons of processed meat. More than 200 people died.
- However, that push has been held back by South Africa’s weak economy, where an increase in VAT and the rising cost of transportation have hurt shopping budgets. A solution to the country’s chronic unemployment problem would be the biggest driver of a turnaround, Chief Executive Officer Lawrence Mac Dougall told reporters.
- Tiger Brands is developing a strategy for expanding in the rest of Africa. The company will start with Kenya, then move on to Nigeria, taking a “conservative approach” with local sales and management laying the groundwork for promoting products, the CEO said.
- The shares have slumped 41 percent this year as the listeriosis crisis took its toll, and investors didn’t see much in Thursday’s earnings that signaled an upturn. The stock gained 0.3 percent to 271.60 rand as of 10:31 a.m. in Johannesburg.
- Read more about Tiger Brands earnings here. The company’s products include Tastic rice, Energade drinks and Doom insect repellent.
- Tiger Brands also announced the unbundling of its 42 percent stake in Oceana Group Ltd., a South African fishing company, as it doesn’t fit with the core business. The process will take about six months, Mac Dougall said.
©2018 Bloomberg L.P.