Tiger Brands Ltd. could make significant job cuts and asset sales this year as Africa's biggest publicly traded packaged-food company looks to reduce costs and survive weak consumer demand worsened by the coronavirus pandemic.
The maker of Tastic rice and Albany bread will begin a process to remove an unspecified number of positions across all its businesses, Chief Executive Officer Noel Doyle said on a call with reporters on Monday. First-half net income slumped 75% and the Johannesburg-based company scrapped a plan to declare an interim dividend, according to an earlier statement.
Major job losses are likely to be necessary “if this business trajectory continues and with the pressures that we expect on consumers,” Doyle said.
The shares traded 2.7% lower at 157.30 rand as of 10:08 a.m. in Johannesburg, extending a decline for the year to 25%.
Tiger Brands was already battling weaker consumer spending in its main market of South Africa before government measures to control the Covid-19 pandemic closed down large swathes of the economy. The company has no plans to cut capital expenditure this year and is looking to spend 1.5 billion rand ($85 million) on growth projects, the CEO said.
Tiger Brands has closed its biscuit factory in Nigeria and looking to sell a meat-products business while exploring options for the company's canned-fruit division, the CEO said. The dividend may be reconsidered at the end of the company's fiscal year, depending on outlook, Doyle said.
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