Pioneer Foods Ltd., South Africa’s second-largest food producer by value, said it would spin off its poultry business within 12 months after it wrote down the unit’s value by 232 million rand ($23 million).
“This impairment is largely the result of the continued macro challenges in the broiler industry,” the Paarl, Western Cape Province-based company said in a statement today. “An abattoir and hatchery, as well as several farms in the Western Cape, were closed as a consequence.”
South African chicken producers have successfully applied for import tariffs to be raised by as much as 82 percent on certain cuts of the meat amid claims that cheaper poultry from Brazil and Europe is undermining the local industry, raising the risk of job cuts in a nation where one in four people is unemployed. The central bank on Nov. 21 cut its estimate for economic growth to 1.9 percent this year from 2 percent, the weakest pace since a 2009 recession.
Pioneer’s adjusted profit, excluding Quantum Foods and other discontinued operations, increased 12 percent to 4.56 rand a share in the year ended June 20, more than the median estimate of 4.24 rand by eight analysts surveyed by Bloomberg. Revenue advanced 10 percent to 20.6 billion rand.
The company declared a final dividend of 86 cents a share, raising the total payout for the year 16 percent to 1.32 rand.