Consumer packaged goods company Tiger Brands expects its earnings per share (EPS) for the six months ended March 31 to be at least 36% lower year-on-year.
EPS from total operations are expected to be between 190c and 216c apiece, which is between 75% and 78% lower than the 864c reported for the six months ended March 31, 2019.
EPS from continuing operations, including value added meat products, are expected to be between 228c and 201c, which is between 74% and 77% lower than the 875c reported for the prior comparable period.
Tiger says its earnings were impacted on by a significantly higher impairment charge of R557-million in the reporting six months, compared with an impairment charge of R106-million in the prior comparable six months.
The impairment charge relates mainly to the company’s export businesses, namely Davita, which supplies powdered soft drinks and seasoning, and the deciduous fruit business.
An impairment was also recognised against the investment in Nigerian associate, UAC Foods. These impairments are as a result of the continual assessment of risks associated with these businesses amid ongoing trading difficulties owing to deteriorating macroeconomic prospects.
This is being exacerbated by Covid-19-led economic challenges, as well as adverse category dynamics.
Earnings in the prior six-month period benefited from the abnormal after-tax capital profit of R282-million arising from Tiger’s sale of Oceana Holdings shares to Brimstone.
The company will release its interim results on or about May 25.