Quantum HEPS down y/y owing to drought, volatile rand
Unfavourable trading conditions in South Africa such as the protracted drought plaguing Southern Africa, the volatile rand and a significant increase in the cost of raw materials all contributed to a sharp decline in headline earnings per share (HEPS) for JSE-listed Quantum Foods, which reported a drop in HEPS to 28c for the year ended September 30, from 54c a share in 2015.
Quantum’s revenue for the year increased by 12.8% to R3.91-billion, with an increase of 14.1% in the South African operations and a decrease of 10.5% in other African operations. Revenue from other African operations contributed 4.1% of group revenue, down from 5.2 %in 2015.
Final dividends a share were 6c, compared with last year’s 10c a share.
The company said in a statement on Thursday that weakened consumer demand would continue to put pressure on the group's profitability, particularly if there was no decrease in the cost of raw material.
“Africa faces a negative medium-term outlook, owing to the slowdown in global commodity prices as well as the drought in Southern Africa. Despite this, we believe that this current situation will turn around and that the group is well positioned to gain benefits from the recent investments in Zambia, Uganda and Mozambique,” the company said.
Quantum noted that it would continue to focus on efficiencies in farms and factories and that the optimal procurement of raw materials would remain a priority.
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