The listeriosis haunted South African food manufacturing giant, Tiger Brands, has suffered a R365 million hit in its income statement due to efforts to shake off the listeriosis crisis emanating from one of its processed meat plant. The JSE listed firm could incur more devastating costs as it faces legal suits from victims of the listeriosis crisis that’s claimed about 200 lives.
Reporting its financial results for the six months ended March Tiger Brands said “Costs associated with the VAMP (Value Added Meat Products which cause all the trouble) product recall, amounting to R365 million (net of insurance claims submitted to date), have been included in abnormal items. These costs exclude ongoing trading losses and are calculated on the basis that VAMP’s facilities are reopened by 30 September 2018.”
The group noted that with the exception of VAMP, its core domestic food businesses delivered a steady performance in the six-month under review. That’s “notwithstanding intense competition and ongoing pressure on pricing as consumers continually search for value.”
Revenue from continuing operations declined by 4% to R15,7 billion and operating income decreased by 8% to R2 billion. The group said revenue was negatively impacted by price deflation of 2,7% and an overall volume decline of 1,6%. Earnings per share from continuing operations decreased by 18% to 852 cents
“Total revenue from domestic operations decreased by 3% to R13,8 billion. Overall, volumes in the domestic business were in line with the previous year. Revenue in Exports and International declined by 11% to R1.9 billion, while operating income decreased by 56% to R85 million.”
This article was first published in SATopShops