Tiger Brands, South Africa’s biggest consumer foods maker, on Monday reported a 1.6 percent rise in full-year profit as it refocuses on its slow-growing home market after a costly foray into the rest of Africa.
“We see a very muted outlook,” said Chief Executive Lawrence MacDougall in a call to reporters, adding that “the macro environment has been the biggest impediment” to company performance.
South Africa’s economy has stalled in recent years amid weak business and consumer sentiment and the government has halved its economic growth forecast to 0.7 percent for this year.
The company, which makes bread, breakfast cereals and energy drinks, completed a strategic review earlier this year under MacDougall after heavy losses in Nigeria.
Tiger Brands sold the bulk of its Nigerian business to Dangote Flour Mills in 2015 and has also pulled back from East Africa as part of the review.
The food maker expects the competition for market share in South Africa to intensify in 2018 as consumers check spending in a weak economy.
“Having largely been successful in enhancing margins, the group is well positioned to navigate this environment and pursue volume growth,” the company said in a statement, adding that its operating margins increased by 110 basis points to 14.8 percent.
Headline EPS is the main profit measure in South Africa and strips out certain one-off items. ($1 = 14.0683 rand)
