South Africa's Pioneer Foods has posted a 62% fall in annual profits due to fines from the country's competition watchdog amid claims of unfair practices in the bread and milling sectors.

Pioneer, which agreed last month to pay ZAR500m in exchange for having an investigation dropped, said today (6 December) that its headline earnings for the year to 30 September were down 62% at ZAR236m.

Operating profit dropped 35% to ZAR753m. Revenue, meanwhile, dipped 3% to ZAR16bn.

MD Andre Hanekom said the results were impacted by the fine, which, he said, "brought an end to an unfortunate chapter in our otherwise proud history". He added: "We have faced our responsibilities and implemented corrective action to ensure ongoing compliance with governing laws and regulations."

Excluding the impact of the fine, Pioneer's adjusted headline earnings rose 43% to ZAR891m. Adjusted operating profit climbed 21% to ZAR1.41bn.

Hanekom said falling prices hit the bulk of Pioneer's business, except its beverage division.

However, he said higher grain prices were "fuelling inflation", with average selling prices up.

Looking to the current financial year, Hanekom added: "A largely sustained earnings performance is expected in the current financial year based on current growth momentum."

Pioneer, meanwhile, is drawing up plans to bid for South African wine and spirits maker KWV. Last week, Pioneer set the value of its offer at ZAR827.8m and said it would maker a "firm intention offer" should "a number of conditions" be fulfilled.

In the meantime, some KWV investors have dismissed the offer, labelling it "unacceptable" and "a joke".