Innscor bucks volatility trend
TANATSWA KANDENGA.
Innscor Africa Limited, a diversified conglomerate listed on the Victoria Falls Stock Exchange, defied economic volatility to achieve a noteworthy volume growth across all of its units in the nine months to March 31, 2024, Business Times can report.
According to company Secretary, Andrew Lorimer, Innscor experienced challenging and turbulent economic conditions in the period under review.
These included significant local currency devaluation and material changes in fiscal policy, with resulted in the Value Added Tax (VAT) status of most basic commodities being changed from zero-rated to exempt. This change increased the cost of production of many of the group’s key lines including bread, milk, maize meal, salt and stockfeed among others.
The input VAT incurred in the production of these items was no longer eligible for a deduction in the respective VAT returns.
“Notwithstanding the challenging economic and regulatory environment, overall group volume performance, on a cumulative nine-month basis, continued to track ahead of the comparative period, enhanced by the significant investment undertaken to extend manufacturing capacities and capabilities across all core manufacturing operations over the past three years. Volume performance was underpinned by a firm recovery in the mill-bake value chain, complemented by strong volume growth in the stockfeed and protein businesses, as well as the beverage and light-manufacturing segment,” Lorimer said.
He added: “The prevailing macroeconomic conditions, coupled with the bold policy measures taken by the authorities, have necessitated a sharp focus by management on re-basing the group’s underlying business models in an effort to maintain relevant, and convenient pricing to the Zimbabwean consumer, and to ensure that critical volume levels are always maintained.
“Efforts continue to also be directed toward ensuring new investments achieve targeted returns, whilst overall free cash generation remains a vital performance metric for the group, in support of future financing and investing activities.”
According to Lorimer, loaf volumes within the bakeries division closed 16% ahead of the comparative nine-month period, enhanced by a consistent flour price, and the maintenance of a convenient exit price point to the consumer, while overall pork volumes at the Colcom division, which comprise of Triple C Pigs and Colcom Foods, closed the period under review 3% ahead of the comparative period, driven by the sustained demand for fresh pork coupled with a recovery of processed lines, including polonies, bacon and hams, all of which have benefited from improved trade dynamics within the retail segment.
At Irvine’s, cumulative nine-month volumes for frozen poultry and day-old chicks closed 5% and 4%, respectively, ahead of the comparative nine-month period.
At Associated Meat Packers , overall protein volumes closed 12% and the beef category, in particular, registered a recovery of 24% against the comparative period, which saw constrained supply owing to foot and mouth disease restrictions.
Natpak delivered a 21% overall volume increase over the fourth quarter, driven by the performance of the rigid division, which grew volumes by 36% in the current nine-month period, as a result of demand from the beverage sector.
The snacks division continued to recover volumes in Quarter on the back of increased maize milling activity, and on a cumulative nine-month basis, volumes were tracking 9% ahead of the comparative period.
“Prodairy closed 33% ahead of the comparative period and were mainly concentrated in the “Revive” dairy blend category, which delivered 36% volume growth.
According to Larimer, the Nyathi brand beer has been gaining popularity and achieving good volume performance during the reviewed period. This growth has been attributed to the continuous improvement of route-to-market initiatives.
