ZIMBABWE – Dairibord Zimbabwe Limited (DZL), a leading milk and dairy products producer in Zimbabwe has reported significant business recovery in the third quarter as the COVID-19 lockdown eased and forex access improved.
According to the company, its sales volumes grew 32% ahead of Q2, with the rise recorded across all product categories i.e. liquid milks 15%, foods 74% and beverages 50%.
However, volumes for the quarter were 10% below Q3 of 2019 but showed a recovery compared to the 46% decline recorded in Q2 2020 vs Q2 2019.
While cumulative sales volumes remained below 2019 at 26% down, the trajectory shows a recovery from the 32% decline recorded in H1.
Revenue for the quarter in inflation adjusted terms was 43% above prior quarter and 8% above Q3 2019.
Year to date revenue was 8% below the same period in 2019 and the cumulative reduction is on account of depressed H1 performance.
The drive to generate foreign currency revenue and contribute towards the company’s foreign currency requirements continued to bear fruit with year to date foreign currency revenue up 50% from 2019.
The Group has also managed to mitigate the negative impact of foreign currency risk by reducing foreign currency liabilities.
Foreign currency liabilities closed the period at US$0. 771 million (including a long-term loan of US$0.302 million) down 34% from US$1.161 million at the end of June 2020.
The short-term liabilities were partly covered by foreign currency cash balances and expected receipts of US$0.312 million.
The company remains the processor with the highest raw milk intake and widest milk intake base in the country.
The business focused on ensuring the viability of suppliers through various support initiatives including competitive prices to sustain long term milk supply growth.
Production output grew on the back of improved supply of raw and packaging material, however, materials, labour, electricity, fuel and water costs continued to escalate.
In its trading update, the group has indicated that the improved performance achieved in the quarter is expected to continue into the final quarter of 2020 as the local and regional economies show signs of recovery.
“The business is geared to exploit opportunities presented in a more stable operating environment by mitigating supply chain disruptions and taking full advantage of weather induced demand,” stated the company.
DZL is the largest dairy company in Zimbabwe; producing and marketing a range of fresh milk and ready-to-drink and long-life milk products. Its export markets include Zambia, Botswana, Malawi, Mozambique and South Africa.
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