Tiger Brands, South Africa's largest food group, has been negatively affected by the altered buying patterns of consumers in many categories.
Tiger Brands chief executive Peter Matlare said yesterday the group continued to face "tough trading conditions" after a six-month period characterised by significant increases in the cost of raw material, high interest rates and a weakening rand exchange rate.
But the group reported a rise of 8percent in first-half headline earnings and predicted modest growth in full year earnings.
Turnover from continuing operations rose by 24percent to R11,154billion for the six months ended March.
Operating income rose 29percent to R1,6billion.
Matlare said strong performances were experienced in fast-moving consumer goods categories despite consumer demand having weakened.
The milling and baking, grocers, snacks and treats, beverages, exports and fishing businesses all contributed to the improvement in operating margin.
Other grains, value-added meat products, out of home and consumer healthcare continued to experience pressure on margins.
The group has taken the decision to exit the ready-to-eat meals domain by the end of May after experiencing sustained losses.
Tiger Brands has some of the most well-known consumer brands in the country including All Gold, Black Cat, Albany, Purity, Tastic and Ace.
The directors declared an interim dividend of 245c a share, in line with the 2008 interim dividend.