South Africa’s biggest food producer Tiger Brands reported on Thursday a 21% rise in half-year profit, supported by strong revenue growth in the first quarter, and resumed an interim dividend of 320 cents a share.
Headline earnings per share – the main profit measure in South Africa – from continuing operations rose to 741 cents in the six months to March 31, it said, compared with 613 cents a year earlier.
The firm had not declared an interim dividend in respect of the 2020 half-year results given the uncertainty at the time over COVID-19 lockdown measures.
The owner of popular brands such as Jungle Oats, Albany bread and Tastic rice said revenue from continuing operations increased by 8% to 16.4 billion rand ($1.17 billion), underpinned by price inflation of 9%.
This was offset slightly by an overall volume decline of 1%.
Group operating income before impairments, abnormal items and accounting charges rose by 16% to 1.6 billion rand, while operating margin, also before those items, rose to 9.6%.
“The performance was supported by strong revenue growth in the first quarter of the financial year, whilst cost saving and efficiency initiatives gained traction across all segments of the portfolio, leading to positive operating leverage for the full six-month period,” it said.
The food producer saw “meaningful” volume growth in both exports and international businesses, which was offset by volume declines in the domestic business, primarily attributable to out-of-home products.
There was also some volume pressure within grains, with the exception of Jungle Oats. The volume declines were partially offset by strong performances in baby and home care, and a solid recovery in snacks and treats, Tiger Brands added.
($1 = 14.0556 rand) (Reporting by Nqobile Dludla; Editing by Jacqueline Wong and Jan Harvey)