.gif)
Marketing & Media trends
Industry trends
BizTrends Sponsors
Subscribe & Follow
Advertise your job vacancies
Trending
Show more
Tiger Brands sales slow as prices rise
Tiger Brands' (TBS) volumes in SA had "moderated" after it raised prices to recover input cost increases‚ the consumer goods company said on Monday‚ 9 February 2015, while reporting a slowdown in sales growth for its first quarter through to December.
© sheelamohanachandran - Fotolia.com
Turnover‚ at R8.2bn‚ was 7% higher than the same three months of the previous year‚ when sales grew 10%. Tiger's shares fell 5.24% to close at R371.94 on Monday‚ but have still climbed 41.8% over the past year.
Tiger said despite input cost pressures being worsened by the weakening rand‚ "the market shares of the company's core brands have remained resilient‚ although competitor activity generally remains intense throughout the business".
Bakery volumes were dented by a five-week strike in KwaZulu-Natal during October and November. Tiger said that operating margins and profitability in the grocery business "continue to improve"‚ while pricing pressure in the home and personal care unit was weighing on margins.
Meanwhile‚ Tiger said its troubled Nigerian business‚ Dangote Flour Mills‚ "has achieved positive volume momentum and operating leverage due to tight cost control and improved efficiencies".
"Its results‚ however‚ have been negatively affected by foreign exchange losses on its foreign currency borrowings‚ following the recent devaluation of the Nigerian naira‚" the company said.
Bloomberg reported on Monday that the naira fell to a record against the dollar after the West African nation postponed elections‚ and in so doing increased risks in an economy already under pressure from the fall in oil prices. The naira depreciated for a sixth day on Monday to the weakest level since Bloomberg started compiling the data in January 1999.
Dangote last week reported a 4.1% higher loss of 2.92-billion naira for the first quarter through to December‚ as the declining naira offset a 27.5% surge in sales.
Tiger's 65.7%-held subsidiary included a currency devaluation charge of 1.29-billion naira and warned that a further devaluation of the currency "will impact negatively on the outlook for the current financial year".
Tiger said on Monday it expected that market pricing "will adjust in time once stability is restored to the local currency market".
"The short-term prospects for the Nigerian businesses remain extremely challenging‚ notwithstanding the positive operational momentum that the DFM (Dangote) business is starting to achieve. Tiger Brands continues to remain focused on the long-term prospects of this business‚" the group said.
Source: BDpro via I-Net Bridge
Source: I-Net Bridge
For more than two decades, I-Net Bridge has been one of South Africa’s preferred electronic providers of innovative solutions, data of the highest calibre, reliable platforms and excellent supporting systems. Our products include workstations, web applications and data feeds packaged with in-depth news and powerful analytical tools empowering clients to make meaningful decisions.
We pride ourselves on our wide variety of in-house skills, encompassing multiple platforms and applications. These skills enable us to not only function as a first class facility, but also design, implement and support all our client needs at a level that confirms I-Net Bridge a leader in its field.
Go to: http://www.inet.co.za
