South African dairy processor Clover Industries has reported higher half-year profits as an improved product mix and increased volumes helped earnings.
The company booked headline earnings of ZAR109.6m (US$14.5m) for the six months to 31 December, up from ZAR93.9m a year earlier.
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Lower finance charges boosted the result but Clover also filed a 6.8% increase in operating profit to ZAR187.7m despite a rise in input costs.
Clover said costs rose throughout the six-month period, although trading conditions eased in the second quarter of its financial year. Widespread industrial action in the middle of 2011 led to subdued consumer spending in the first three months of Clover’s financial year but the trading environment improved in the second quarter, the company said.
Revenue increased 7.2% to ZAR3.6bn thanks to an improved product mix and higher volumes, rather than price hikes, Clover insisted.
The increased volumes helped the company partially recover the higher input costs but not entirely, it explained.
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By GlobalDataClover said its brands “performed well”, which it said “underlined the importance of brand strength during testing times”.
The company’s headline earnings per share – a key financial metric in South Africa – fell from 73.2 cents to 61.2 cents due to a share issue when the group was listed in December 2010.
