Pioneer results hit by penalty

Johannesburg - Pioneer Food Group [JSE:PFG] on Wednesday said its results for the first half ended March 31 will likely differ from last year's, as a result of the R350m it set aside to pay a penalty for anti-competitive behaviour.

The firm made a provision of R350m, but late last year agreed to a package of penalties in exchange for the dropping of investigations into uncompetitive practices in its wheat milling, baking, poultry and eggs businesses.

Pioneer agreed to a R500m fine, a reduction in its gross profit by R160m for some of its flour and bread products and to increase its capital expenditure by R150m.

In a trading statement on Wednesday, Pioneer said the final results for the first half are not yet known but will differ from the same period last year due to the R350m it provided for the fine.

"For the avoidance of doubt, a provision of a similar extent is not foreseen for the six-month period ended March 31. Pioneer Foods will revert to shareholders with a further trading update - to quantify the change as a result of the aforesaid non-provision - once certainty exists in regards to the final financial results for the six-month period," it said.

Pioneer has said that 41 employees endured disciplinary hearings around price collusion.

In February Pioneer withdrew its 1 200 cents per share offer for Paarl-based wine and brandy maker KWV Holdings. The initial offer was valued at R828m.

Pioneer withdrew as there was not enough KWV shareholder support for its takeover bid.