Zambeef (AIM: ZAM), the fully integrated cold chain foods and retail business with operations in Zambia, Nigeria and Ghana, today announces its unaudited interim results for the six months ended 31 March 2018.
Key Financial Highlights:
USD (‘000) H1 2018 | USD (‘000) H1 2017 | |
Revenue | 123,847 | 118,381 |
Gross Profit | 46,581 | 38,494 |
Operating Profit | 6,297 | 4,502 |
Profit before tax | 2,758 | 590 |
Profit after tax | 1,180 | 533 |
EBITDA | 11,112 | 8,897 |
EBITDA Margin | 8.97% | 7.51% |
Operating Profit Margin | 5.08% | 3.80% |
Performance Overview
- The Group has delivered a solid financial performance, driven by:
o Strong gross profit and volume growth in the Retail and Cold Chain Food Products division and the Stockfeed division
o Continued aggressive expansion of the retail network
o Robust operational performance from the farming operations - Four Macro outlets opened with a further four expected to open this year
o Target to open 10 new Macro outlets each year - Shoprite rollout of new stores continues
o Zambia – three more store openings expected in the second half
o Nigeria – one new store opened
o Ghana – one new store opened and one expected in H2 2018 - Second half of the year expected to see a significant number of key projects
o Continue to grow the retail network and drive retail revenue to increase demand from the CCFP and stock feed operations
o Commission new Copperbelt distribution hub which will increase capacity and improve efficiencies in the Copperbelt and North Western Province operations
o Complete expansion of breeding farm and hatchery to increase day-old chick production from 344,000 to 430,000 birds per week
o Complete new stock feed plant at Mpongwe to ensure additional stock feed capacity - Continue to look at ways of strengthening our balance sheet through
o Disposal of non-core assets
o Continued focus on debt reduction
Commenting on these results, Chairman Dr. Jacob Mwanza said:
“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.”
“Volume and margin growth in the Retail and Cold Chain Food products division and stockfeed 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.”
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