ZIMBABWE – Food and dairy processor, Dairibord Zimbabwe Holdings has recorded 131% increase in net profit to US$269,844 during the half year ended 30 June 2018 on volumes growth and restructuring.
Revenue for the period was 15% above same period last year to US$50.8 million while volume grew 6% to 41 million litres as a result of increases demand led by high value lines like condiments, ice creams and cartonised fun and fresh.
“Demand was firm across all categories, however, growth in volumes sold was constrained by supply challenges for both packaging and raw materials for the majority of the group’s product lines,” said chairman, Josphat Sachikonye in a statement.
The company said it was able to meet its foreign currency requirements (although this remains low compared to monthly needs) as a result of 15% growth in export revenues recorded at US$616,000.
Zimbabwe remains to be facing challenges in securing hard currency required for critical imports but the management anticipates its export initiatives to be fruitful and help contribute to the company’s earnings.
Net cash outflow from operations improved to $765 000 from prior period outflow of US$1.25 million on the back of improved operating performance and collections. However, tightening of trade terms by suppliers and investment in inventories negated the overall cash flow performance.
During the period under review, raw milk intake was 12% above prior year levels.
“The improved intake benefited from enhanced milk supply strategy which is anchored on recruitment of more farmers, herd growth and productivity improvement at farm level,” said Mr Sachikonye.
According to him, the growth in milk intake will benefit market share for the liquid milks category and reduce dependence on imported milk powders, which are expensive and difficult to secure given the foreign currency challenges.
A Herald report revealed that its regional subsidiary, Dairibord Malawi posted a loss for the period of $293,000 on depressed performance.
In March, the milk processor said it was assessing the Malawi unit after a series of loss making periods that weighed down on the group’s earnings.
For the first quarter ended April, Dairibord’s revenue grew 17% with firm demand across all its categories.
The company expects a sustained economic growth despite challenges with foreign currency.