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Pioneer shares up on profit rise

Johannesburg - Pioneer Food Group [JSE:PFG] posted a 39% growth in half-year profit on Monday, sending the shares of the country's second-biggest consumer goods maker higher.

Pioneer, which makes staple foods such as maize meal, pasta and juices, said headline earnings per share rose to 451 cents in the six months to end-March from 325c a year earlier.

Revenue increased by 8% to R9.45bn, despite energy constraints, the company said.

Power utility Eskom, which has been facing supply shortages, has been implementing frequent controlled blackouts.

The firm's shares climbed 2.8% to R185.09 by 11:15, outpacing a slightly higher JSE All-share index.

Pioneer, which is in the middle of a strategic review that includes disposing of and closing its underperforming and non-core assets, plans to sell its Pepsi bottling plant in response to weak consumer spending in South Africa.

The groceries division, which accounts for more than a quarter of revenue, grew 9% but was weighed down by losses from Pepsi, in a country where rival drink Coca-Cola has 80% of the market share.

Pioneer said it will stop distributing Pepsi in July. Losses from Pepsi in the first half of its financial year were equivalent to the whole of the previous year, the firm said.

"The brand just has not resonated," CEO Phil Roux said.

Pioneer divested from its poultry business, which was listed separately in Johannesburg October as Quantum Foods.

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