South Africa‘s Pioneer Food Group reported a decline in half-year earnings on Monday, driven down by maize shortages, sending its shares down more than 8%.
The food and drinks company, which uses maize in many of its products, said it was unable to counter the shortfall.
“The year-on-year regression in the performance of the maize category, off the strong comparative period base, was more than expected, given sustained selling price deflation despite raw material cost inflation and a weaker milling performance,” it said.
At 15:05, the company’s share price was down 11.69% to R73.35.
Pioneer said continued economic weakness will put pressure on consumer spending.
Diluted adjusted headline earnings per share (Heps) for the six months ended March 31 fell 14% to 272.4 cents from 320 cents a year earlier, the food and beverage company said.
Heps is the main profit measure used in South Africa, which strips out once-off items.
Pioneer, which also operates in Britain, said earlier this year that the business was doing well despite Brexit tensions.
The food company’s revenue rose 11.5% to R11.039 billion ($768.20 million), driven by growth in bread, wheat, rice, beverages, cereals and sausage rolls in Nigeria.
Pioneer issued a dividend of 105 cents per share for the six month ended 31 March 2019.