Listed food producer Pioneer Foods has been hit by a price fixing fine, its interim results for the six months to March 31, 2010 showed.

Releasing the results on Monday, the manufacturer of Sasko bread and Ceres beverages said operating profit had declined by 22 percent to R427-million.

Headline earnings declined by 51 percent to R144-million ? or 81.7 cents per share ? from the comparative reporting period.

Excluding the provision for potential administrative penalties, adjusted headline earnings increased by 66 percent to R494-million or 280 cents per share.

Revenue was down by seven percent to R4.150-million.

Pioneer was recently fined R1.6-billion (10 percent of the 2009 group annual revenue) for fixing wheat milling prices.

Prior to this fine, it had been penalised for bread price fixing.

Looking ahead, the group said all its businesses would be challenged by increasing production costs, that included substantial electricity price hikes throughout the value chain, a constant upward trend in the oil price, above inflation wage and salary increases and the uncertain direction of the rand relative to other currencies.

"These cost factors and the recently introduced wheat import tariff have the potential to place slight upward pressure on selling prices."