Consumer goods maker posts rise in H1 profit after sale of Nigerian unit

May 24, 2016 5:28 AM

Tiger Brands sold its 65.7 percent stake in Dangote Flour Mills last year after three years of failing to stem losses which were worsened by the oil price slump and export restrictions in Nigeria.

Boxes of Jungle Oats, one of South Africa's Tiger Brands original products, sit on a shelf in a Cape Town convenience store, November 19, 2015.

South African consumer goods maker Tiger Brands said on Tuesday first-half earnings rose 14 percent, boosted by the sale of its Nigerian business, but warned tough trading conditions would persist for the rest of the year.

Headline earnings per share (EPS) - including continued and discontinued operations - reached 974.6 cents from 852.9 cents a year ago, South Africa's biggest consumer foods maker said in a statement. Excluding the sale of Nigeria's Dangote Flour Mills headline, EPS was flat.

Tiger Brands sold its 65.7 percent stake in Dangote Flour Mills last year after three years of failing to stem losses which were worsened by the oil price slump and export restrictions in Nigeria.

The company, which makes bread, breakfast cereals and energy drinks, bought the business as part of a plan to expand elsewhere in Africa to offset slow growth at home.

Inflation pressures, a scorching drought and slow economic growth in South Africa are expected to continue to hurt demand, Tiger Brands said.

"The outlook for the balance of the year remains challenging, with downside risk to the macro-economic environment, both in South Africa and in a number of African markets, likely to add further pressure on consumers," it said.

Most export markets were hit by local currency devaluations and foreign currency shortages in many African countries. The company operates in Mozambique, Nigeria and Zimbabwe, among others.

It said total sales rose 9 percent to 12.9 billion rand. An interim dividend of 363 cents per share was declared.