PIONEER FOOD GROUP LIMITED - Earnings Guidance For The Six Months To 31 March 2014

Earnings Guidance For The Six Months To 31 March 2014

Pioneer Food Group Limited
Incorporated in the Republic of South Africa
Registration number: 1996/017676/06
Share code: PFG
ISIN code: ZAE000118279
(“Pioneer Foods” or “the Company” or “the Group”)

EARNINGS GUIDANCE FOR THE SIX MONTHS TO 31 MARCH 2014

Shareholders are advised that a reasonable degree of certainty exists that earnings
per share of the Group for the six months to 31 March 2014 is expected to increase
by between 80% and 95% and headline earnings per share is expected to increase
by between 95% and 110% from the previous corresponding period.

To provide a consistent perspective on the operational performance from continuing
operations, an adjustment is made for the impact of the Phase 1 (2006) BEE
transaction in the respective reporting periods and the treatment of Quantum Foods
as a discontinued operation.

Consequently, adjusted earnings per share and adjusted headline earnings per
share from continuing operations is expected to increase by between 38% and 52%
from the previous corresponding period.

Revenue growth from continuing operations for the reporting period is in line with the
growth reported for the four months to 31 January 2014 as published on SENS on 14
February 2014.

Earnings growth benefitted from value enhancement initiatives and the continued
focus on cost reduction and efficiencies. In addition, a strong volume performance
from the international business resulted in increased profitability, aided by rand
weakness.

The cash settled Phase 1 (2006) B-BEE transaction is accounted for in terms of
IFRS 2 and impacted by the relative movement in the Group’s share price and the
number of scheme participants. A charge of R65 million was recorded in the
corresponding period as a result of the share price increasing from R53.00 to R71.57
in that period. A gain of R48 million was recorded in the current reporting period
following the decline in the number of scheme participants and the share price
declining from R87.50 to R83.50.

In terms of IFRS 5, Quantum Foods is treated as “an asset held for sale” and a
“discontinued operation”. Consequently, the net assets of Quantum Foods has to be
valued at the lower of the carrying amount or fair value less cost to sell as at the
reporting date. An independent valuation resulted in a further impairment of R54
million to the consolidated net asset value of Quantum Foods, reflecting the
continuing challenges in the broiler industry.

The aforementioned adjustments do not have any cash flow implications for Pioneer
Foods.

The interim financial results for the six months ending 31 March 2014 is expected to
be announced on or about 19 May 2014. The information provided in this earnings
guidance has not been reviewed or reported on by the Group’s independent external
auditors.

Paarl
4 April 2014

Sponsor
PSG Capital

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