JSE-listed Pioneer Foods expects to report a 44% year-on-year improvement in operating profit and a 32% year-on-year improvement in headline earnings for the six months ended March 31.
The company noted in a trading update on Thursday that adjusted headline earnings a share are likely to increase to between 309.1c and 334.5c, compared with the 253.4c reported for the six months to March 31, 2017.
Pioneer’s operating profit for the interim period under review is expected to be between R922-million and R991-million.
Sales volumes for the six months under review were 4.3% higher, while group turnover fell by 2.8% to R9.9-billion rand, owing to sales price deflation in soft commodities.
Cereals, long-life fruit juice, accompaniments and baking aids performed well from a volume and operating profit point of view.
The snacking category recorded negative volume growth and a decline in profitability.
Liqui-Fruit gained share, while Weet-Bix and Safari maintained its share.
Long-life fruit juice and dried fruit export volumes and margins recovered in line with expectation and posted an improvement on 2017 profitability. Margin recovery is however, as previously indicated, not comparable to that achieved during 2016.
The performance of joint ventures (JVs) as a whole was materially impacted by the one-off impairment of certain items on the Heinz Foods South Africa balance sheet, together with a poor operating performance by this entity.
Regulatory approval of the Heinz Foods acquisition is in progress. The contribution from JVs, excluding Heinz Foods, showed a year-on-year improvement.
Pioneer Foods will release its interim results on or about May 21.