South Africa's Pioneer Food Reports 6% Fall In Annual Profit
Food and drinks company Pioneer Food Group Ltd on Monday reported a 6% fall in full-year profit and said it expects its takeover by PepsiCo Inc for $1.7 billion to be finalised in early 2020.
Pepsi announced the deal in July in a boost to Pioneer's shares and a sector hurt by drought and tough trading conditions.
Pioneer said on Monday the companies had filed their submissions for regulatory approvals in a number of markets, with South African regulators expected to make an announcement on the matter next year.
The company also reported a drop in headline earnings per share, the main profit measure in South Africa, to 511 cents in the year to Sept. 30, from 545 cents a year earlier.
Pioneer, whose brands include Weet-Bix cereal, Liqui Fruit juice and Sasko bread, said its revenue and volume growth was "acceptable" given the difficult environment, hurt by weak demand and maize shortages. The company uses the staple crop in many of its products.
Impairment charges also weighed on its earnings. In the year-earlier period the results were helped by asset and share sales, Pioneer said.
Inflationary pressures on costs were likely to continue with weak demand and muted consumer spending, the company warned, adding that recovering underlying cost inflation in its market prices and efforts to cut costs remained a priority.