Clover returns to historic profitability levels

Clover Industries’ return to profitable levels had been offset by impairment on a R439 million loan to an entity it had unbundled last year, according to Clover CEO, Johann Vorster, who expressed his satisfaction with the company’s return to historic profitability levels, but said it had not been an easy feat.

He said Clover took a “prudent decision to impair” the loan extended to raw milk co-operative business, Dairy Farmers SA (DFSA), following the resignation of CEO Jacques Botha and chairperson Dirk Reyneke on the eve of Clover’s annual results being announced. DFSA was established last year after Clover unbundled it as a new producerdriven co-operative to take over the raw milk purchases the company had previously handled directly.

In an interview with Farmer’s Weekly, Vorster said Botha, a former chief financial officer at Clover, had only intended to remain in the position for a brief transition period following DFSA’s establishment. He said Reyneke too had been appointed as chairperson and had indicated he believed it was time to allow for an independently elected representative to take up the position.

Speaking about Clover’s performance, Vorster said normalised headline earnings were up by more than 220% to R395 million, although this excluded the DFSA loan impairment.

He added that despite the impairment, Clover still believed in the DFSA business model and would continue to work closely in supporting the co-operative.

On a like-for-like basis, group revenue, excluding DFSA, increased nearly 8% to R8,3 billion. Normalised headline earnings per share also increased more than 220% to 206,9c/share (excluding the DFSA loan impairment) and the group declared a final gross cash dividend of 48,68c/share, he said. – Sabrina Dean