Tiger Brands, which makes cereal, energy drinks and rice, said a small rise in first-half profit on Wednesday, held back by rising raw material costs at home and its underperforming Nigerian unit.
(READ MORE: S.Africa's Tiger Brands Q1 sales up 10%)
Headline earnings per share from continuing operations increased by seven per cent to 856 cents in 2014 from 801 cents in 2013.
[DATA TBS:Tiger Brands Limited]’s turnover was 11 per cent higher comparable to the same period in 2013.
On the downside, the group’s overall gross margin declined by 0.9 per cent to 30.9 per cent.
(READ MORE: Tiger Brands hit hard as HEPS down 3.8 per cent)
The negative results was attributed to the inflationary effects of the weak Rand on input costs, which were not fully recovered in pricing in the South African operations.
However, the company is defiant saying it’s on a recovery path.
“The group is making steady progress in implementing key strategic initiatives aimed at regaining market shares and further strengthening its core brands,” Tiger Brands said.
“The group continues to partially absorb cost increases in a number of categories, mitigating the impact, where possible, through cost reduction initiatives and improved efficiencies.”
The group’s domestic businesses registered an eight per cent increment to 11 billion rand while the export and international businesses, including Nigeria, grew turnover by 20 per cent to 3.7 billion rand benefiting to an extent from the weaker Rand.
“The Export and International businesses outside Nigeria continue to show strong growth, benefiting to some extent from the Rand’s relative weakness.”
The company also reported that income from associate companies grew by four per cent to 266 million rand, with good performances recorded by Oceana, UAC Foods and National Foods Holdings.
The Board remains confident that the group’s strategies are appropriate for the businesses and will ultimately deliver the desired outcomes.
Tiger Brands is one of the largest manufacturers and marketers of FMCG products in Southern Africa, and has been for several decades.
The Company declared an interim dividend of 329 cents per share for the half year ended 31 March 2014, which represents an increase of 6 per cent compared to the 2013 interim dividend of 310 cents per share.