Tiger Brands Ltd, South Africa’s biggest consumer goods maker, took another write off charge at its money-losing Nigerian unit, it said on Wednesday, as it posted an 11 percent increase in full-year profit.
Tiger Brands, which makes pasta, energy drinks and breakfast cereal, wrote off 105 million rand ($9.5 million) of certain factory assets of Dangote Flour Mills following a review of their utilisation levels.
The impairment comes within a year of an 849 million rand write down of the same business, which suffered a 6.28 billion naira ($36.2 million) pre-tax loss in August as it struggles with tough competition and weak margins.
Tiger Brands has been trying to turn profit from Dangote Flour Mills since paying nearly $200 million for a controlling stake two years ago as part of broader plan to expand into rest of Africa to offset slow growth at home.
The Johannesburg-based company said Nigeria, where it competes with Nestle Nigeria, remained central to its expansion.
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Tiger Brands also reported an 11 percent increase to 18.16 rand in headline earnings per share (EPS), helped partly by cost cuts at home, where debt-laden consumers are spending guardedly.
Headline EPS, the widely watched measure of profit in South Africa, strips out certain one-off items.
Reuters
