CLOVER: 2,310 +8 (+0.35%)
South Africa's Clover triples FY profit, impairment hurts shares
* Normalised FY profit up 225 pct
* Profits boosted by drought recovery, value-added business
* Records $29 million impairment
* Shares down more than 3 pct
(Adds impairment details, listeria impact, dividend, updates
By Tanisha Heiberg
JOHANNESBURG, Sept 12 (Reuters) - Clover Industries'
normalised annual profit more than tripled, the South
African dairy company said on Wednesday, boosted by its exit
from the milk business and a recovery from drought the previous
Clover, which processes products including yoghurt,
beverages, cheese and olive oil, has focused on developing
higher margin, value-added branded food and beverages as part of
its strategy to move away from lower-margin commoditised dairy
Normalised headline earnings per share (HEPS) rose to 206.9
cents for the year to June 30 from 63.9 cents.
Headline earnings - South Africa's most widely watched
profit gauge - strips out certain one-off items.
Clover's HEPS strips out a 439 million rand ($29 million)
impairment relating to a revolving credit loan given to the
Dairy Farmers of South Africa (DFSA).
Clover, which holds a 26 percent voting right in DFSA, would
swing into a full-year loss with a diluted headline loss of 22.9
cents per share for the period compared with 63.9 cents in the
year-ago period if the impairment was included.
By 1128 GMT shares in Clover fell 3.96 percent to 14.30 rand
after rising more than 2 percent in early trade, with traders
saying the impairment had dented sentiment on the stock.
"This is the one thing that is worrying the market. But from
a normalised point of view management have delivered and are
moving in the right direction," said portfolio manager at Cratos
Wealth Ron Klipin.
The previous financial year profits were affected by a
"Clover reported an exceptional turnaround from a
drought-stricken prior year to deliver its best financial
performance since listing," said the firm, which listed in 2010.
Clover said it had lost 6.5 million rand a month in fees
after processed meats were recalled by health authorities after
South Africa suffered the world's biggest outbreak of listeria
last year that killed more than 200 people..
"The listeria outbreak resulted in losses in principal fee
income which could not be replaced during the reporting period,"
Clover said. However, Clover added that it recovered some of the
losses through fees earned on services such as production, sales
and merchandising and distribution for a competitor.
Clover declared a final dividend of 48 cents, bringing its
total dividend to 75 cents for its financial year compared with
26 cents in the prior year.
($1 = 15.0855 rand)
(Editing by James Macharia; Editing by Ken Ferris)
First Published: 2018-09-12 08:43:36
Updated 2018-09-12 13:52:05
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