Libstar Holdings, the food manufacturer, reported much lower export sales volumes for the year to December 31 due to continuing shipping delays and weak demand for dry condiments and tea.
Notwithstanding this, the group would report revenue growth of 10.7%, with volumes up 3%, while pricing and mix changes contributed 7.7% to sales growth for the year, Libstar said in a trading statement on Friday.
The gross profit margin declined in the second half due to an under recovery of overhead costs in its main export-facing divisions, and raw material, packaging and manufacturing cost inflation in the balance of the portfolio.
Libstar also contended with the costs and disruption brought about by load shedding, particularly in the second half.
A further R13.1 million was invested in generator capacity. However, the ongoing operation of generators added R39m of direct operating costs. R31m of this was in the second half and directly impacted the gross profit margin.
General operating expenses, excluding impairments, were contained to a 6.5% increase. This was despite increases in distribution costs, driven by diesel cost increases.
Normalised earnings before interest, tax, depreciation and amortisation was expected to be between R1.02 billion and R1.05bn, representing a decrease of between 2.6% and 5.6% compared to the prior year.
A R277m impairment recognised the production volume loss from the fire that destroyed the Denny Mushrooms’ Shongweni facility last September; current and future trading margin scenarios; and the impact of rising interest rates on segmental business plans and discount rates.
Headline earnings per share (Heps) were expected to be between 43.7 and 46.3 cents per share for the year, representing a decrease of between 8.6% and 13.6%.
BUSINESS REPORT