Pioneer Foods Says S. Africa Spending Slowdown to Curb Trading
Pioneer Foods Ltd. (PFG), a South African cereals and fruit-juice producer, said it expects slower spending to curb its full-year performance.
“Trading across the group’s product categories is expected to be challenging for the rest of the year as consumer spend remains constrained,” the Johannesburg-based company said in a statement today. “The judicious management of price points and margins amid volatile input costs will be key.”
Africa’s biggest economy, where one in every four people is unemployed, grew 2.1 percent in the fourth quarter of 2012, more than the 1.2 percent in the previous three months, which was the slowest rate since a 2009 recession. The annual inflation rate reached 5.9 percent in March, close to the upper end of the central bank’s 3 percent to 6 percent target range. Banks are planning to limit unsecured loans as bad loans swell.
Profit climbed 39 percent to 325.7 million rand ($35 million) in the six months through March from a year earlier, Pioneer said. Revenue rose 11 percent to 10 billion rand, while the company raised the interim dividend 5 percent to 46 cents a share.
The stock declined for the first time in four days, losing 1.2 percent to 77.40 rand by 9:48 a.m. in Johannesburg.
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