ZAMBEEF says the depreciation of the Kwacha is expected to impact negatively on the Group’s results.
ZAMBEEF also said that the recent electricity supply issues in Zambia have resulted in unforeseen generator running costs being incurred and additional operating challenges for the Group.
In a trading statement, the firm said in view of this, the Group expects US Dollar reported revenue for the year to 30 September 2015 to be lower than market expectations, largely because of the weakening of the Zambian Kwacha against the US Dollar.
It however said that the improvement in its gross profit margins will result in operating profits and net cash inflow from operating activities exceeding expectations.
It said this will, in turn, result in the Group’s expected US Dollar reported adjusted profit before tax being in line with market consensus.
Carl Irwin, Joint Chief Executive of Zambeef said, “In line with the Group’s strategy, it is pleasing to note that gearing has reduced significantly following the disposal of Zamanita Limited. Furthermore, driving the cold chain food products through the retail network will continue to be a key focus“.
It said continued management focus on the retailing division and the opening of additional retail stores have resulted in the cold chain food products division continuing to perform well.
‘The cropping division has also had a good year, with gross margins exceeding management’s expectations. The conclusion of the sale of Zamanita Limited to Cargill on 1 June 2015 resulted in a cash inflow to Zambeef of US$27.0 million and a substantial reduction in the Group’s indebtedness,’ it said.