ZAMBIA – Zambeef Products Ltd has reported 6% growth in revenue driven by increasing volumes and improving margins in the core divisions namely Retail & Cold Chain Food Products, and Stockfeed for the first half of the financial year ended 31 March 2018.
Profit after tax increased more than three-fold to US$2.25 million as compared to US$ 510,705.16 reported for the same period the previous year.
Given improved economic conditions and increased demand in macro stores, the company grew its business during the period as the past two years were affected by volatile economic conditions including sharp depreciation of Zambian Kwacha against US Dollar.
“The volatile economic conditions in Zambia over the previous two years, including sharp depreciation of the Kwacha against the US Dollar and relatively high inflation, presented challenges for the business.
I am pleased to say that this period of uncertainty appears to be behind us.
We are entering a period of relative stability in the economy, supported by tight fiscal and monetary control by Zambia’s Ministry of Finance and the Bank of Zambia,” said Chairman Dr. Jacob Mwanza.
Operating profit increased 41% while net income grew 123%, the encouraging results signifying increases in overhead but this was offset by 18.8% rise in costs for fuel and electricity, impact of the closure of some store as result of the cholera outbreak, and the outbreak of Foot and Mouth Disease.
Zambeef which operates 205 retail outlets, both own-brand and within Shoprite supermarkets continued to reinforce its position as the largest beef producer in Zambia, this helped by increase in consumer demand.
In the first half of the year, the company indicated that it spent US$7.5 million on capital investment for continuing operations during which US$2.9 million was spent on continued roll-out of new modern Macro retail outlets across Zambia where it opened four new stores.
Driven by demand, Zambeef plans to open a further four Macro retail outlets in the second half of the year.
The period saw changes to its board when its Co-founder and former Joint Chief Executive Officer Dr Carl Irwin retired from the group on 31 March 2018 after 23 years of service.
Also, on 24 May 2018, subsequent to the period end, Tim Pollock, Joint Chief Executive Officer announced his resignation from the Board for personal reasons, then Francis Grogan became the sole CEO of the group.
In the full-year outlook, Zambeef expects to grow by 5.5%, improve exports and gain confidence in consumption and investment lending.
According to it, economic strength as a result of clearance of government arrears and continued close attention to monetary policy conditions will boost consumer demand especially for its core target consumers in lower-income markets.
“The Group will maintain its focus on expanding the retailing and distribution footprint and on improving margins and increasing profitability.
We will continue to expand the Cold Chain Food Production capacity to meet increasing consumer demand; complete the build out of the new stock feed plant at Mpongwe and continue to strengthen our balance sheet, through the disposal of non-core assets,” Mwanza added.