Pioneer Foods expects decline in earnings

Johannesburg - Pioneer Food Group [JSE:PFG] said on Friday that it expects a decrease of between 59% and 66% in headline earnings per share for the 12 months ending September 30, 2010, from previously.

It also expects a decline of between 55% and 62% in earnings per share.

It follows finalisation of the settlement of the Bread, Milling and other matters with the Competition Commission earlier this month, the group said.

Pioneer said that based on the settlement agreement, the effect on earnings will only partially be expensed in the 2010 financial year by way of an increased provision of R304m, taking into account the original provision of R350m and the subsequent payment of the R196m penalty in the bread matter.

The balance will be expensed in the 2011 financial year, it said.

"If the provisions and the administrative penalty in the Bread matter (which has already been paid) are not taken into account, an increase of between 53% and 60% could have been expected in earnings per share and an increase of between 38% and 45% in headline earnings per share," the group said.