South African food producer’s earnings hit By meat recall after listeria outbreak

Business News

SOUTH AFRICA’S biggest food producer Tiger Brands said a recall of cold meat products in response to a deadly listeria outbreak has cost it 365 million rand ($29 million) so far and weighed heavily on its half-year earnings.
The company suspended production in March at four plants in South Africa that produced polony and other cold meats that were linked to the world’s largest ever listeria outbreak, which has killed 200 people since early 2017.
Those facilities are likely to stay closed for much of the second half of the year, the company said on Thursday, as it completes remedial work and awaits guidance from the Department of Health.
Chief Executive Lawrence MacDougall said the recall “impacted our headline earnings quite significantly” after the company reported a 16 percent drop in headline earnings per share (EPS) to 868 cents for the six months ended March 31. EPS, which strips out certain one-off items, is the main profit measure in South Africa.
Recall and related costs to date amounted to 365 million rand net of initial insurance claims, the company said in a statement. These costs excluded ongoing trading losses.
The company is now busy deep cleaning the facilities and has allocated 50 million rand of capital expenditure to ensure that the plants are ready for product relaunches.
“We’re using this time of the shutdown to make all the repairs and maintenance and structural changes that we intended to make and new ones that have been suggested by international experts over this period,” MacDougall told shareholders at the results presentation, without giving much detail.

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