Clover Tumbles Most in a Month on Lower First-Half Profit

Clover Industries Ltd. (CLR), South Africa’s biggest dairy processor, slid the most in more than a month in Johannesburg trading after reporting a 34 percent drop in first-half earnings.

Clover fell as much as 4.3 percent, the steepest intraday decline since Feb. 1, and traded 3.2 percent lower at 16.36 rand as of 11:14 a.m. local time. Earnings excluding one-time items retreated 34 percent to 38 cents a share in the six months through December, Clover said in a statement. Sales rose 11 percent to 3.98 billion rand ($436 million).

Clover is seeking to restore earnings growth after profit was dragged down by higher costs for fuel and marketing. The Johannesburg-based company is counting on its so-called cold chain, the largest in South Africa, to drive profit.

The company began distribution of Red Bull GmbH’s energy drinks on March 1 and will start to sell Enterprise Foods Pty Ltd. products in June, Chief Executive Officer Johann Vorster said by telephone. The company’s cold-distribution business is one of its “strongest points,” he said.

Fresh milk consumption in Africa’s largest economy contracted 3.1 percent in 2012, while demand for long-life milk grew 7.5 percent, according to Clover.

Clover has lost 6.6 percent this year compared with a 1 percent decline in the 10-member (JFPPS) FTSE/JSE Africa Food Producers and Processors Index, making it the second-worst performer after chicken-producer Astral Foods Ltd. (ARL)

To contact the reporter on this story: Jaco Visser in Johannesburg at avisser3@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

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