ZIMBABWE – National Foods Holdings Limited, Zimbabwe’s listed agri-industrial concern, has reported a 33% growth in full year revenue to ZWL128.4 billion (US$354m) in the 12 months ended June 2022.
The top-line performance was driven by 8% growth in volumes to 569,000 tons, and inflation which led to rise in prices.
Its gross profit grew by 84% in absolute terms, mainly due to inflationary gains on raw material positions with operational expenditure shooting up by 37% year on year, with correction of some major cost lines occurring in real terms during the year.
The company’s operating profit increased by 301% compared to prior year to ZWL 14.74 billion (US$40m), whilst Profit Before Tax increased by 1 390% to ZWL 20.4 billion (US$56m).
This was driven by significantly increased interest costs in line with higher interest rates; as well as a decline in equity accounted earnings of 41%, which was largely attributed to the disposal of Pure Oil during the period.
During the period under review, National Food’s flour milling operations registered a 1.9% volume growth with a slow-down in the last quarter.
The installation of the new mill at its Bulawayo site has commenced increasing its wheat milling capacity by around 2,000 tons per month.
Whilst there was improved volume momentum in the Maize unit in the second half of the year, volumes still closed 2.3% below last year, largely due to last year’s excellent harvest.
Its stockfeed operations registered an improved performance with volumes increasing by 12%, driven by high demand in the poultry sector.
The company revealed that phased 3-year upgrade of its Aspindale plant is now underway and has commenced with the installation of a PLC system which will enhance and optimise operational controls.
Shifting focus to its Downpacked unit primarily packing rice and salt, saw encouraging volume growth of 31% versus last year.
Rice volume growth was driven by the informal sector, whilst Red Seal salt remained the brand of choice for consumers.
Meanwhile, its Traded Goods unit saw volume growth of 34% versus prior year, largely as a result of growth in the pasta category.
The Board has approved the purchase of a new pasta line in response to the growing demand for pasta in the country.
This investment will also see the localisation of pasta production, which traditionally has been imported as a finished product.
National Food’s Snacks division continued to register increased volumes, rising by 24% against the prior period, as the increased production capacity came on stream.
However, its biscuit volumes declined by 3% compared to last year, with a marked reduction in volumes towards the end of the year.
The decline was largely brought about by higher flour prices which impacted affordability of the product.
The company’s board has approved the purchase of a new biscuit line, which will allow National Foods to extend its biscuit portfolio beyond the current basic loose biscuit proposition to more specialised biscuits such as creams.
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