Dairibord FY19 sales volumes tumble 39%

PHILLIMON MHLANGA

Zimbabwe’s largest dairy processor, Dairibord Holdings Limited saw its sales volumes dropping by as much as 39% during the year to December 2019, due to the difficult operating environment.

The economy has been battered by declining disposable income, inflationary pressures, power shortages and foreign currency shortages among other challenges, resulting in the business environment turning even more austere in the reviewed period.

The downward trajectory was, however, lower than the industry performance, due to strong brands and extensive market reach, according to board chairman, Josphat Sachikonye.

This, Sachikonye said, allowed the business to sustain capacity utilisation of 44% against a manufacturing industry average of 36.4%.

“Sales volumes dropped by 17% against an industry average decline of 23% for the manufacturing sector.

The liquid milk category achieved a marginal growth of 0.2% due to an increase in local raw milk intake.

The beverages category declined by 23%, while the food category which accounts for 9% of the sales volumes declined by 39%,” Sachikonye said.

Inflation adjusted numbers show that revenue for the company grew 60% to ZWL$1.115bn during the 12 months to December 2019 from ZWL$697m in prior year.

This was driven by growth in exports and necessary product price adjustments.

Export revenue grew by 100% from US$1.7m to US$3.4m as the company continued to drive exports in order to increase its regional foot print and to generate foreign currency to cover import requirements.

Earnings before depreciation, amortisation, interest and tax went up 37% to ZWL$114.9m from ZWL$84m.

Profit for the year stood at ZWL$141m during the reviewed period, reflecting a 341% increase from ZWL$32m in prior year.

Total assets grew 33% to ZWL$577m from ZWL$433m. “The business achieved an operating profit margin of 8.1% up from 7.8% in prior year.

The improved performance was on account of reduced fixed overheads, diligent procurement practices and intensified drive to improve operational efficiencies,” Sachikonye said.

The company’s foreign liabilities was reduced by 76% to US$0.93m from US$3.9m as the company focused on managing and reducing foreign denominated debts.

Going forward, Sachikonye said the COVID-19 pandemic will have a far reaching and unpredictable impact on the way the business will operate this year and beyond.

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