Pioneer Foods dumps the poultry business
Pioneer Foods, South Africa's second-largest food producer by value, said it would spin off its poultry business within 12 months after it wrote down the unit's value by R232-million.
"This impairment is largely the result of the continued macro challenges in the broiler industry," the Paarl, Western Cape province-based company said on Monday. "An abattoir and hatchery, as well as several farms in the Western Cape, were closed as a consequence."
South African chicken producers have successfully applied for import tariffs to be raised by as much as 82% on certain cuts of the meat amid claims that cheaper poultry from Brazil and Europe is undermining the local industry, raising the risk of job cuts in a nation where one in four people is unemployed.
The central bank on November 21 cut its estimate for economic growth to 1.9% this year from 2%, the weakest pace since a 2009 recession.
Pioneer's adjusted profit, excluding Quantum Foods and other discontinued operations, increased 12% to R4.56 a share in the year ended June 20, more than the median estimate of R4.24 by eight analysts surveyed by Bloomberg.
Revenue advanced 10% to R20.6-billion. The company declared a final dividend of 86 cents a share, raising the total payout for the year 16% to R1.32. – Bloomberg