Tiger Brands took a $120 million hit on Thursday as it wrote-off the full value of its loss-making Nigeria unit.
South Africa’s biggest consumer foods maker has not made a profit from Nigeria’s Dangote Flour Mills (DFM) since paying nearly $200 million for a 65 percent stake in the pasta and flour maker three years ago.
Tiger Brands has written-off 1.7 billion rand (N24 billion) from Dangote Flour Mills, adding to the two impairments last year totaling N13.4 billion, as the business struggled with tough competition and a weakening naira.
“We spent a bucket load of cash learning those lessons and shareholders are clearly upset,” outgoing chief executive Peter Matlare Matlare said.
“We have to revise what the strategy should look like and that’s work that is underway right now,” added Matlare, who will step down at the end of the year after eight years at the helm.
Earlier this week, Tiger Brands said it would no longer provide funding to DFM as part of wider review of its investment in the company, a move that could test DFM’s survival.
Tiger Brands also wrote down N3.5 billion from its investment in Nigeria’s Deli Foods, in which it holds 49 percent stake, citing a weaker currency and slowing demand.