Clover Industries has booked higher half-year earnings as the South African dairy firm lapped one-off costs and saw price increases boost sales.
Headline earnings jumped 93.6% jump in headline earnings to ZAR141.1m (US$13.1m), or 77.3 cents per share, for the six months to the end of December. Net profit was up 95.4% at ZAR163.8m. The group recorded an increase of 70% in operating profit to ZAR235.1m.
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Revenues were up 10.4% at ZARR4.3bn. Clover pointed to price hikes implemented during January and July last year to recover higher input costs.
Clover chief executive Johann Vorster admitted the company benefited from the absence of costs booked in last year’s first half but said the business had put in a “good performance”.
“Although from a relatively low base due to the once-off costs relating to price promotions and new product launches in the prior period, we are pleased to have delivered a good performance in the challenging operating environment that continued to be marked by rampant inflationary pressures which impacted on input costs and the consumer base.”
Vorster said the company anticipated at least ZAR96m worth of savings from the “successful completion” of an efficiency strategy. He added price increases would continue through to the second half of the year in order to address the “substantial costs pressures on raw milk prices”.
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By GlobalData“The current environment will make it difficult to achieve sales volumes growth and therefore earnings growth in the second half. In spite of this, we are focused on building on the solid base provided by Project Cielo Blu by continuously investing in new products and technology in addition to delivering synergistic acquisitions and joint ventures that will sustain momentum and deliver on our longer term strategy locally and across Africa,” Vorster said.
Share prices in Clover were up 0.26% to ZAR1,950.00 at GMT14.51 today (17 March).
