September 5, 2008


South Africa's AVI to sell loss-making seafood unit


AVI Ltd., South Africa's second- largest consumer-products maker, said full-year profit fell 0.6 percent because of a loss at the seafood unit it plans to sell.


Net income dropped to 488.3 million rand (US$62 million), or 1.58 rand per share, in the year ended June 30, from 491.3 million rand, or 1.56 rand, a year earlier,


Increased energy and soft commodity prices put pressure on margins in the second half, AVI said.


AVI's I&J seafood division plans to sell its Alpesca SA unit, which posted an operating loss of 10.2 million rand (US$1.27 million ) for the year because of lower catch rates of shrimp and hake in Argentina.


Alpesca, which made a profit of 33.1 million rand (US$4.10 million ) in the previous year, is being sold as "it has proven difficult for I&J to achieve consistent economic returns" from it, AVI said.


The loss of the unit is "a tragedy" because fish will become a more popular food over the next decade, an analyst said.


I&J is negotiating with prospective buyers for Alpesca, which was treated as a discontinued unit in the earnings, AVI said.


I&J reported lower fish volumes because of reduced fishing quotas, though it achieved higher prices. In fact, much of the increase in input costs was offset by higher fish product prices.

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