South African food manufacturer Tiger Brands has said its first-half profit growth was tempered by tough trading conditions and heavy promotional discounting.
The company said headline earnings reached ZAR186m (US$27.4m) in the half ended 31 March against ZAR56.9m in the same period of the previous year.
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Revenue rose 1% over the period to ZAR10.4bn, with Tiger Brands saying the “modest” increase was influenced by price deflation in certain food commodities relative to the same period last year. The company also pointed to the impact of promotional discounting in some categories to maintain volumes, and a “continuation of the difficult trading conditions experienced in the previous financial year”.
Over the half, operating margin fell to 15% from 15.7% in the same period last year, with margins falling in snacks and treats and its personal care divisions.
Tiger Brands said it expects trading conditions to “continue to remain challenging” for the remainder of the current financial year. However, it added that it expects to benefit in the second half from efficiency improvements and “other performance enhancing measures which have been implemented by management”.
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By GlobalData
