ZIMBABWE – Dairibord Holdings, Zimbabwe’s manufacturer of liquid milk, food and beverage products has seen its sales volumes in the half year ended 30 June 2020 decline by 32% to 27.3 million litres.
According to the company its Q1 volumes were 19% down, while Q2 volumes declined by 46% as the impact of the COVID-19 induced restrictions took a toll on operations.
Liquid Milks, Foods and Beverages volumes dropped by 19%, 39% and 41% respectively compared to same period last year.
Raw milk intake for the period was 13 million litres, 6% below prior year and was consistent with the decline in national milk production.
The group remains the biggest milk processor accounting for 38% of national intake and continues to be committed to supporting local farmers to grow milk supply so as to reduce dependence on imported milk powders.
The most significant limiting factor to growth in raw milk production over the period was the high cost of stock feeds, escalating at a rate higher than inflation.
Revenue earned by the Zimbabwe Stock Exchange listed entity in the six months was ZWL1.2 billion (US$3.315m), a 15% decline from the corresponding year, however in historical terms revenue grew by 537%.
However, focus on generation of foreign currency revenues continued with exports over the period accounting for 8% of the sales volume up from 5% in the same period last year despite logistics constraints in accessing regional markets due to COVID-19 restrictions.
The Group also focused on cost control despite the operational inefficiencies caused by the dis-economies of scale.
As a result, the periods operating costs declined 16% from prior period which lead to the business achieving an operating profit of ZWL107 million (US$295.6K) compared to ZWL43 million (US$118.8K) for the same period in 2019.
The company incurred a loss of ZWL0.48 million (US$1,326) from a profit of ZWL55.40 million (US$153K) due to the monetary loss of ZWL135 million (US$373K) while an operating profit margin of 9% was attained up from 3% in prior year.
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