March 12 (Bloomberg) -- Clover Industries Ltd., 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 FTSE/JSE Africa Food Producers and Processors Index, making it the second-worst performer after chicken-producer Astral Foods Ltd.
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