JSE-listed food producer, AVI, on Monday said it is likely that the South African slow consumer demand environment would continue into the foreseeable future.
It said the weaker Rand against a basket of currencies will put more pressure on input costs. It said selling prices will need to be adjusted during the second half of the current financial year.
South Africa’s incessant power cuts did not have too much negative impact on the group’s performance, it added.
“AVI has installed full back-up power capabilities at many of their manufacturing sites, with further mitigation in progress in both their manufacturing and retail activities,” it said.
“Consequently the irregular power supply in the first semester did not have a material impact on their results, however, prolonged and severe load shedding or major power outages could result in significantly higher operating costs and lost sales,” it added.
The company made these comments as it released its results for the six months ended December last year.
Revenue for the period under review surged 11 percent to R6 billion ($496 million) from R5.4 billion ($446.9 million). Gross profit however rose by 12 percent to R2.6 billion ($215 million) from R2.3 billion ($190.3 million)
The AVI said the board is confident that AVI is well-positioned to weather a difficult trading environment.
But the company will continue to actively pursue growth opportunities from the current brand portfolio.