Innscor Africa’s full year profit nearly grows to triple digits 97% reaching US$10m

ZIMBABWE – Diversified group, Innscor Africa Limited has reported a revenue of ZWL23.938bn (US$66.14m) for the year ended June 2020, representing a 24% increase on the comparative year.

The revenue growth, according to the group was achieved on the back of mixed volume performance, the gradual removal of subsidies on most products, as well as inflation-induced price adjustments.

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­“The group’s associates delivered a pleasing increase in earnings with all business units contributing positively to the overall result.”

Innscor Africa Chairman – Mr Addington Chinake

­The group’s improved product mix, coupled with a well-priced strategic raw material investment, enhanced production and overhead efficiencies, combined to deliver an operating profit of ZWL3.859bn (US$10.76m) representing a growth of 54% from previous year’s.

Its profit before tax for the year at ZWL4.544bn (US$12.55m) was 69% ahead of the comparative year, whilst overall current annual headline earnings per share of 450.56 ZWL cents showed an 84% increase versus the same period last year.

Innscor’s overall profit for the year nearly jumped to triple digits, increasing by 97% to ZWL3.636 billion (US$10.04m) despite a challenging operating environment.

The environment remained tough for businesses on the back of diminishing consumer spending, foreign currency shortages and inflation compounded by the effects of Covid-19 pandemic.

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­“The group’s associates delivered a pleasing increase in earnings with all business units contributing positively to the overall result,” stated Group Chairman Mr Addington Chinake.

Associates’ Performance

At National Foods, the firm delivered a solid performance, notwithstanding a 25% volume drop to 456,000 tonnes, driven largely by reduced consumer purchasing power.

In the bakery division, overall annual loaf volumes declined by 36% as limited flour availability at the necessary pricing level required to maintain loaf pricing within the regulated pricing framework characterised the first half of the financial year, resulting in lower production.

Associate company, Profeeds recorded a 36% decrease in feed volumes and a 25% decrease in day-old chick volumes.

Mr Chinake indicated the majority of this volume decline was within the retail platform, which serves the small-scale segment of the market.

The Colcom division comprising Triple C Pigs and Colcom Foods recorded an 18% decline in overall sales volumes.

Apart from the fresh pork category, which continued to show pleasing volume growth, all other categories showed a volume decline.

However, pig production grew by 4% from the comparative year, with over 103,000 animals processed during the year; a pleasing result and one that stems from improved genetics and production efficiencies across the herd.

Irvine’s on the other hand experienced a 13% volume growth in table eggs, with the volumes achieved being a record high for the business.

Frozen chicken volumes were however 21% behind, whilst day-old chick volumes were down by 27% as demand reduced in the small-scale farmer market in response to the current economic conditions, diminished crop yields and the disruptive effects of COVID-19 lock-down measures.

Volumes at AMP Group grew 7% on the back of growth in retail market, which saw the first Texas Meat Market open in Bulawayo.

Other light manufacturing services such as Natpak, Prodairy and Probrands recorded growth in volumes of 18%, 5% and 4% respectively while Probottlers went down 20% mainly due to power supply challenges.

NatPak ‘s growth was driven by the increased utilisation of the corrugated packaging plant and the newly commissioned rigids packaging operation.

While Prodairy growth was spearheaded by launch of its butter offering which was well received by the market, quickly becoming the market leader.

Probrands, volumes improved primarily driven by improved drought relief supplies.

Despite the challenging operating environment, management remains upbeat of future performance supported by various strategies put in place. One of them is continued support for contract farming partnerships.

“The group remains the largest grain user in the country and efforts to build internal capacity through contact farming, smart partnerships and small-scale capitalization to supplement the supply of imported raw materials will continue,” said Mr Chinake.

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