Tiger Brands [JSE:TBS] shares fell more than 4% on Monday afternoon after the company announced that its profits had plummeted some 75% because of Covid-19 impact on its food business.
Tiger Brands, one of the largest food manufacturers in Africa, reported profits of R359.6 million for the six months ended at March 2020 compared to R1.4 billion for the corresponding period a year before.
On a webinar call, the company's CEO Noel Doyle warned that challenging economic circumstances would persist for some time with the company expecting to lose up to R500 million due to the pandemic.
"It's quite clear that pre the Covid environment, the business was already challenged in terms of its ability to grow volume and sustain premiums. That will be a key focus for us going forward in getting to the correct pathways that will allow us to grow at or above market share," he said.
Tiger Brands had to close a bakery in KwaZulu Natal temporarily as a precaution, after staff members tested positive for Covid-19.
The company is now implementing a "re-engineered organisational structure" to grow and optimise costs.
Chamber of Baking executive director Geoff Penny said the pressures that weighed on Tiger Brands in the past two months would have a similar impact on other companies in food manufacturing, and that seen food processing facilities had already closed down over health concerns.