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UPDATE 1-S.Africa's Libstar annual profit drops on higher pandemic-related costs

· 03/17/2021 02:24
UPDATE 1-S.Africa's Libstar annual profit drops on higher pandemic-related costs

Adds details from statement, dividend details

- South African food producer Libstar Holdings Ltd LBRJ.J reported a 13.1% drop in full-year operating profit on Wednesday, hit by expenses of 65 million rand ($4.37 million) related to the COVID-19 pandemic.

Libstar, producer of Denny mushrooms and Lancewood dairy products, said normalised operating profit fell to 774 million rand in the 12 months ended Dec. 31 from 890 million rand a year earlier.

Normalised headline earnings per share from continuing operations fell 13.8% to 71.3 cents.

The expenses were related to donations to needy communities, personnel-related expenses and costs of personal protective equipment. Including other items, operating expenses increased by 22.0% to 2.1 billion rand, Libstar said.

Revenue for the company's retail and wholesale customer division, its biggest contributor to sales, grew by 12.3% on strong demand for home-cooking products, as consumers ate out less due to lockdowns.

But these restrictions hit its food service division, its second-biggest sales contributor, with revenue slumping 23.8% due to the shutdown of restaurants and eateries in the second quarter, as well as subsequent continued lower occupancy rates in the wake of the pandemic.

Export revenue increased by 6%, while industrial and contract manufacturing revenue declined by 0.9%, mainly due to subdued demand from national and multinational brand owners.

Overall, total group revenue for the year grew 4% to 10.3 billion rand.

Libstar, which contract manufactures Kellogg's K.N noodles and Pringles snacks, declared a cash dividend of 25 cents per share, same as the previous year.

($1 = 14.8846 rand)

(Reporting by Nqobile Dludla; Editing by Himani Sarkar and Rashmi Aich)

((nqobile.dludla@thomsonreuters.com; +27103461066;))