Zambeef’s records increased operating profits for the year

LUSAKA, ZAMBIA – Food company Zambeef Products Plc recorded a 189 percent increase in operating profit for the financial year to September 30, 2015, shareholders were told at the group’s annual general meeting in Lusaka today (December 21, 2015).

The company’s operating profit increased by K106 million to K162 million, from K56.2 million in 2014. Meanwhile, profit before tax excluding exchange losses, increased by 728 percent to K107 million, equivalent to US$15 million in US dollar terms.

Strong performance in Zambeef’s core business of cold chain food production and distribution helped propel the profit figures, explained Joint Chief executive Officer Carl Irwin.

“Despite significant macro-economic challenges, the group’s performance was commendable, particularly in our core cold chain food products business, and we look forward to growing this business further, both in Zambia and the wider SADC/COMESA region, and developing the business into a regional food supplier,” he said.

Zambeef’s core cold chain food products division performed exceptionally well, recording an increase in gross profits of 29.1 percent in kwacha terms. Its growing retail network now totals 150 outlets from the previous 139, and continues to play a vital role in enhancing the operations of the division. The division, which includes the production, distribution and retailing of beef, chicken, pork, fish, dairy products and eggs, is expected to drive the growth of Zambeef in 2016 with more outlets planned by the company as well as through its partnership with Shoprite.

That focus on cold chain products helped the company to record an increase of 223 percent in cash generated from operations, which rose from K81.6 million to K263.8 million.

The large cash inflow from operations as well as the sale of the group’s Zamanita edible oils division for US$27 million to Cargill during the year resulted in Zambeef reducing its term debt by US$21.2 million and its working capital facilities by US$25 million while the total net debt in US dollar terms was reduced by US$46.2 million to USD72.3 million, from US$118.5 million in 2014.

The group converted a significant amount of its US dollar denominated debt into kwacha in order to mitigate future currency exchange exposure.

“The year has seen a renewed focus by Zambeef on its cold chain food product operations. These are cash generating operations that will form the cornerstone of Zambeef’s future success,’ said Joint Chief Executive Officer Francis Grogan.

“Zambeef has had a successful operational year despite the challenges in the economy and retains a positive outlook towards its operations and has set sights on continuing to grow its operations in the next financial year,” he added.

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About Zambeef Products Plc
Zambeef Products Plc is the largest integrated agribusinesses in Zambia.
The group is principally involved in the production, processing, distribution and retailing of beef, chicken, pork, milk, dairy products, eggs, stock feed and flour. The group also has large row cropping operations (principally maize, soya beans and wheat), with approximately 8,120 hectares of row crops under irrigation which is planted twice a year and a further 8,480 hectares of rain-fed/dry-land crops available for planting each year. The group is also in the process of rolling out its West Africa expansion in Nigeria and Ghana, as well as developing a palm project in Zambia.
It slaughters around 55,000 beef cattle, 50,000 pigs and 6 million chickens, and processes 10 million litres of milk per year. The company has 120 retail outlets throughout the country, along with three wholesale depots.
More information is available at www.zambeefplc.com.