Five Roses tea and Bakers biscuits parent company AVI battled a tough trading environment, worsened by load shedding, and price competition, to report lower headline earnings.

The food and beverages company on Monday released its interim results for the half-year ended December 31, 2019.

Headline earnings per share declined 3.8% to 293.8 cents, in line with analysts expectations. Revenue grew by a mere 1% to R7.1 billion.

Operating profit increased R1.46 billion, only 0.1% higher than the previous year and not enough to offset higher finance costs and lower joint venture income. The group declared an interim dividend of 160 cents per share, which is 3% lower than last year’s dividend.

“The trading environment remained difficult with continued pressure on consumer spending resulting in sales volume weakness in many of our businesses,” the group said.  AVI had to battle against “aggressive competitor discounting”, especially on Black Friday in November which ate into December sales.

During the period, fishing business I&J had sold its interest in a joint venture with Simplot. The deal realised income of R633 million and a capital gain after tax of R374 million, the group said. 

The group expects some of its categories to experience “low and even negative” growth rates as trading conditions remain difficult.