Zambeef Products PLC has reported a full-year profit rise but the Kwacha headwinds contributed to a mixed revenue picture, in what was a “challenging year” for the food producer.
In the year ended September 30, revenue was up 13% to ZMW3.13 billion from ZMW2.78 billion last year.
In dollar terms, revenue declined by 9.2% year-on-year to USD254.5 million from USD280.3 million.
Zambeef said: “The weakening of the Zambian Kwacha against the USD by approximately 24%, increase in the cost of fuel by 19%, together with constrained electricity supply that started in July 2019 due to reduced electricity generation arising from the low water levels in the Kariba Dam, impacted not only the Zambeef group’s performance but also our customers spending power.”
Pretax profit rose 38% to ZMW38.7 million from ZMW28.0 million, or by 11% to USD3.1 million from USD2.9 million last year.
The company added: “The profitability was mainly driven by cropping, increased volumes and margins in the stock feed division and retail and cold chain food products which is in line with our strategic imperative of consistent revenue growth through expansion of our retail network.”
The company operates a chain of 226 retail outlets and it also produces and distributes beef, chicken, pork, dairy, eggs, fish, flour and stockfeed in Zambia, Nigeria and Ghana.
Output in its stockfeed operations rose year-on-year to 218,762 tonnes from 200,846 tonnes.
Zambeef said: “As we had anticipated, 2019 proved a challenging year for the group, driven by difficult economic and market conditions that impacted negatively on the group’s financial performance, particularly in the first half of the year.
“Set against this challenging macro-economic backdrop, the group’s results were reassuring, especially in the second half of the year.”
Looking ahead, the firm expects the tricky market conditions in Zambia, which is mired by a high national debt and electricity supply constraints, to continue hindering consumer confidence.