Zambeef (AIM: ZAM), the 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 2019.
Key Financial Highlights:
USD (‘000) | USD (‘000) | ZMW (‘000) | ZMW (‘000) | ||
Revenue | 118,833 | 123,847 | 1,416,490 | 1,226,083 | |
Gross Profit | 39,477 | 46,581 | 470,570 | 461,152 | |
Operating Profit | 954 | 6,297 | 11,377 | 62,337 | |
(Loss) / Profit before tax | (2,531) | 2,758 | (30,156) | 27,293 | |
(Loss) / Profit after tax | (2,668) | 1,180 | (31,789) | 11,670 | |
EBITDA | 6,846 | 12,581 | 81,601 | 124,552 | |
EBITDA Margin | 5.76% | 10.16% | 5.76% | 10.16% | |
Performance Overview
- In a challenging environment, the group has delivered the following financial highlights:
– Revenue for the Group increased by 15.5% in Kwacha terms (down 4% in USD terms)
– Executed on the Group’s strategic focus on stepping up the roll out of new stores across Zambia
– Improved margins and continued revenue growth since 31 March 2019 - The Group’s Retailing and Cold Chain Food Products business now consists of 216 retail outlets, both own-branded and within Shoprite supermarkets
– Revenue in the period was supported by an increase of sales in stock feed, edible oil and flour
– Masterpork Limited has continued to be profitable
– The Group has reported a return to profitability of Master Meats Nigeria and Master Meats Ghana - Revenue growth and increased production from the Group’s wheat mill
– Strong first half of revenue growth which resulted in EBITDA increasing from ZMW7.6m to ZMW10.4mo Produced 8,618 tonnes of flour in the period, ahead of budget - Continued investment in capital projects
– The new Kitwe Processing Plant in the Copperbelt is now operational
– USD450,000 investment has been made in the production at Zamleathers’ Zamshu brand to double capacity from 500 to 1000 pairs of shoes per day - Second half of the year expected to see higher Gross Profit margins
– Consistent revenue growth through the retail network and stock feed operations with a strong focus on customer care
– Improving cash conversion from strong working capital and tight control on Capex
– Strategic focus on cost saving measures
Commenting on these results, Chairman Dr. Jacob Mwanza said:
“Significant fiscal pressures on the Zambian economy during the period have presented challenges for the market and impacted the disposable income of Zambeef’s customers. Exchange rate movements have not favoured the Group in the period and the depreciation of the currency has led to the Group reporting realized exchange losses.
“Despite the tough trading conditions, the management team have continued to deliver on the Group’s key strategic initiatives throughout the period and the second half of the year is expected to see an improvement in both revenue and margin performance.
“The Group’s strategic focus on the continued roll out of new Macro outlets across Zambia contributed to revenue growth in the period and its retail footprint increased to 216 retail outlets.”
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