ZIMBABWE – Zimbabwe’s largest milling company, National Foods Ltd has managed 25% rise in profits to US$17.174 million for the year ended 30 June 2018 and expects to benefit from better economic environment for its business following a new political dispensation.
The group noted that this could only be possible if the ruling regime focused on solving problems ailing the economy, including forex crunch and economic slowdown.
Revenue for the period under review reached US$297.9 million compared to US$289.5 million in the comparable period last year.
Profit before tax rose 23% to US$21.21 million, signifying the boost from President Mnangagwa’s pledge to champion economic revival from years of regression under the initiative deemed ‘Zimbabwe is open for businesses.’
“The period under review witnessed significant political changes in our country,” said the group’s chairman Todd Moyo.
“Now that the critical election phase is behind us, it is imperative that attention is urgently directed at resolving some of the serious challenges facing the economy.
“Provided that meaningful solutions to these challenges can be found, we believe that there will be significant opportunities to supply a broader range of categories as economic conditions and the position of the consumer improve further.”
The increase was attributed to 7.1% rise in revenues for the year, weighed down by slow performance in the flour division which contributed to a higher percentage in volumes.
Whilst record Flour volumes were achieved, margins were significantly impacted by the inability to increase prices as a consequence of the price of bread which remained constant for the greater part of the year.
Pure Oil delivered US$5.2 million in earnings as volume for the year increased by 7.1% compared to last year, reaching 543,000 MT.
Maize recorded 11% rise in volumes while stockfeed division fell 13% as a result of the deadly Avian Influenza that affected poultry production in Zimbabwe and South Africa, the largest poultry producer on the continent.
However, the country was on January declared Avian Influenza free by the World Organisation for Animal Health following legion efforts to control the spread and further outbreak of the virus.
In the snacks and treats division which produces Zapnax, Kings and Iris brands, volumes increased by 31% with firm growth from Iris loose biscuits.
The company declared 5.64 US cents per share in dividends payable in respect of all ordinary shares.