Pioneer foods hit by price fixing fine

2010-05-24 08:11

Listed food producer Pioneer Foods has been hit by a price fixing

fine, its interim results for the six months to March 31 2010 showed.


Releasing the results today, the manufacturer of Sasko bread and

Ceres beverages said operating profit had declined by 22% to R427 million.

Headline earnings declined by 51% to R144 million – or 81.7 cents

per share – from the comparative reporting period.

Excluding the provision for potential administrative penalties,

adjusted headline earnings increased by 66% to R494 million or 280 cents per

share.

Revenue was down by seven percent to R4.150 million.

Pioneer was recently fined R1.6 billion (10% of the group’s annual

revenue for last year) for fixing wheat milling prices.

Prior to this fine, it had been penalised for bread price

fixing.

Looking ahead, the group said all its businesses would be

challenged by increasing production costs, that included substantial electricity

price hikes throughout the value chain, a constant upward trend in the oil

price, above inflation wage and salary increases and the uncertain direction of

the rand relative to other currencies.

“These cost factors and the recently introduced wheat import tariff

have the potential to place slight upward pressure on selling prices,” the group

said.

 

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