Zambeef Plc has posted huge profits after tax of K11.6 million after producing strong volume growth in both its cold chain food products and stock feed sales.
According to a consolidated statement of comprehensive income for the six-month period ending March 31, 2018, Zambeef has posted massive profits of K11.67 million after tax, more than doubling what it earned in the prior corresponding period last year of around K5.2 million, driven by strong volume growth in both its cold chain food products and stock feed sales.
“Zambeef’s first-half performance was good, with revenue growing 6 per cent; operating profit increasing 41 per cent; net income growing 123 per cent; driven by increasing volumes and improving margins in the core divisions namely; retail & cold chain food products, and stock feed,” Zambeef stated in its unaudited results.
“The Group’s half-year performance was encouraging given significant increases in overhead following the removal of fuel and electricity tariffs, the closure of some store as result of the cholera outbreak, and the outbreak of foot and mouth disease.”
Data shows that Zambeef, the country’s largest agro-processing company, also profited from its stock feed segment, which has been a strong driver to its revenue growth.
“In stock feed, the Group’s new plant in Mpongwe reached 42.6 per cent capacity against a target of 30 per cent. The division continues to be a strong profitability and revenue driver for the business,” it stated.
Commenting on the group’s results for the half-year period, Zambeef board chairperson, Jacob Mwanza, stated that the turbulent economic conditions the company had experienced in previous financial years were truly over.
“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,” Dr Mwanza, the former BoZ governor, stated.
“Volume and margin growth in the retail and cold chain food products division and stock feed division indicates that the worst of the economic hardship has dissipated. 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.”
Zambeef’s gross revenues hit K1.22 billion during the six-month period under review, from K1.16 billion in the prior corresponding period, according to its unaudited results.