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Quantum Foods revenue hit by South African operations

26 May 2015

Recently listed Quantum Foods (QFH) on Monday, 25 May 2015, said it had a achieved a "credible" set of results in the first half of its financial year‚ with the report its first since it was unbundled from Pioneer Food Group.

Quantum Foods revenue hit by South African operations

In the six months to end March 2015‚ Quantum reported a 182% rise in headline earnings per share to 26.3c‚ compared with the year-earlier period. Group revenue‚ however‚ declined by 3.7% to R1.7bn largely due to the South African operations.

"Revenue from the South African operations decreased by 5% ... following the business model change at the Western Cape operations. Revenue from the African operations increased by 26.7% ... due to the inclusion of revenue from the group's Zambian distribution centre for the period under review‚" the company said.

Quantum Foods operates in four key areas: animal feeds‚ eggs and layer livestock‚ broilers‚ and related businesses in Africa outside of SA.

Despite the operations it already has in Zambia and Uganda‚ Quantum Foods believes there is room for further expansion for its egg business into other parts of Africa.

In the period under review‚ Quantum said operating profit surged 443% to R82m‚ compared with the year-earlier period. It declared no dividend as the group does not have a formal dividend policy yet.

Looking ahead‚ Quantum said the outlook for the South African economy remained challenging.

"Low economic growth‚ instability in electricity supply and higher inflation prevail in an environment that has a continual negative impact on consumer spending. Maize costs have recently increased due to the drought in the early part of 2015. The weakened rand also has a negative impact on input costs.

"Due to the repositioning of the group‚ some of these risks have now been mitigated. The various supply chain and cost-saving initiatives‚ as well as a relentless focus on efficiencies‚ should assist the group in navigating through a more challenging period‚" the company said.

Source: BDpro via I-Net Bridge

Source: I-Net Bridge

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