CAPE TOWN, February 9 – South African packaged goods company Pioneer Food Group said on Friday total volumes were up 5.2 percent in the three months to December, but turnover fell 2.4 percent largely due to sales price deflation in soft commodities.
The group said its South African business, excluding exports, delivered a solid performance despite a challenging economic backdrop and intensified competition, by delivering volume growth of 4.7 percent. South African revenue however declined by 5.2 percent.
Revenue from its international business, including South African exports, grew by 19.5 percent.
“The increase in sales volumes resulted in Pioneer Foods gaining market share, confirmed by the growth in our composite corporate market share in top end South African grocers on a three-month basis ending December 2017,” it said.
“The improved sales volume performance and normalisation of raw material cost positions (most notably in respect of maize) should support higher first half margin and profit compared to the corresponding period.”
Pioneer however said the improvements would be partially offset by the underperformance in the wheaten value chain as well as price promotional related margin pressure.
It said its short-term strategy remained focused on restoring the health of the core portfolio, but that it was mindful of the major detractors in the wheat and baking value chain, as well as concerns around the performance of the Heinz SA business which was currently being repositioned.
The international business would also be impacted by a stronger rand.
Pioneer said it had considerable operations in the Western Cape province, and, given the water crisis in the region, had developed contingency plans to ensure sustained supply of products.
“In addition to a continued containment in overall water consumption, a number of contingencies, have been put in place to limit the impact of the water crisis as far as possible,” the company said.
– African News Agency (ANA)