South African dairy group Clover Industries issued another profit warning and slashed its earnings per share guidance by as much as 41% citing a prolonged drought and volatility in the rand.
“Stagnant and falling selling prices and rising input costs are forcing Clover to make difficult decisions to sustain short-term operations, while still aligning these decisions with long-term growth objectives,” the Johannesburg-listed firm said in a statement yesterday (7 September).
Clover said it expects annual profits to fall by as much as 67% for the year ended 30 June, more than the 40-55% drop it forecast in May when the last profit warning was issued. With businesses in dairy, groceries and beverages, the company also downgraded its headline EPS outlook yesterday to a range of 62.4 to 66.1 cents, from the 83.58-111.56 predicted in May.
In March, Clover reported its operating profit was down 5.2% in the first six months of the year at ZAR322.7m (US$24.6m). Headline EPS declined 14.7% to 99.8 cents. When the profit warning was issued in May, the company cited a squeeze from higher input costs and “subdued” consumer sentiment.