July was a tough month for food producer Tiger Brands, which suffered a R100 million in stock loss due to unrest in parts of Gauteng and KwaZulu-Natal, coupled with an additional R647 million loss following a major recall of some of its canned products.
The unrest started following the arrest of former president Jacob Zuma for disregarding the Constitutional Court by refusing to appear before the State Capture Inquiry, but morphed into waves of violence and looting, potentially wiping R50 billion off South Africa's GDP. Tiger Brands' properties were looted and destroyed in the violence.
This incident was shortly followed by the recall of 20 million KOO and Hugo’s canned vegetable products due to potential defects in the cans.
In a trading update on Tuesday, the company, whose brands also include Jungle Oats, Oros and Purity said it lost hundreds of millions because of both events. This affected its earnings and resulted in an impact of 318 cents per share.
The company is due to release its results for the year ended 30 September, by the 19th of November. Tiger Brands said its headline earnings per share (HEPS) from total operations for the year are likely to increase between 15% and 25% compared to 2020. And it anticipates that its earnings per share from total operations will grow by 80% to 90%, more than the 612 cents growth it saw in 2020.
"The increase in HEPS from total operations was primarily due to the losses recorded in Value Added Meat Products (Vamp) in FY2020 compared to a small profit in the year ended 30 September 2021".
In 2020, Tiger Brands sold its Vamp business, made up of the Enterprise brand, to Silver Blade Abattoir, a subsidiary of Country Bird Holdings.
Tiger Brands added that, its headline earnings per share from continuing operations are expected to be 5% to 15% lower than the 1 196 cents reported in 2020. While its earnings per share from continuing operations are likely to increase between 15% and 25% for the year.