In accordance with the requirements of the Securities & Exchange Act No. 41 of 2016, Zambeef Products PLC announces its unaudited results for the half-year period ended 31 March 2022

Performance Overview

• The period saw relative macroeconomic stability with the kwacha appreciating relative to the US Dollar and inflation on a steady downward trajectory. However, input costs to our livestock divisions increased as a result of increasing commodity prices and fuel costs. Together with a tight monetary policy, this resulted in constrained consumer spending which affected the demand for our products.
• However, the Group posted results that were ahead of market expectations, driven by good performance in our cropping and stockfeed division and continued focus on cost control.
• Market Share gains and increased Layer feed prices in our stock feed business resulted in increased profitability and sustained margins.
• The Group faced margin pressure arising from a rise in input costs such as Soya and energy across our value chains. However, our diversified portfolio of brands and vertically integrated businesses ensured the impact is balanced across the divisions, thereby enabling the overall group to profitability growth.

Strategic Focus

• Our strategic focus remains to optimise our asset utilisation and maximise returns. We remain committed to focusing on our existing core businesses, in which we strive to be the best in class, continued divesture of non-core assets and a fit for purpose people strategy. As part of delivering on our strategic imperatives, the business will progressively turn to towards capacity expansion opportunities across our business, which will see increased profitability in the medium to long term.

Outlook

• We anticipate macro-economic stability for Zambia to continue over the medium term supported by improved investor sentiment, elevated copper prices and the possibility of an International Monetary Fund supported debt management program.
• Our strong brands will help us maintain customer loyalty while the vertically integrated business model positions us well to secure both supply and a market for our products. The future recovery in the economy and a strong management team have positioned us well for improved stakeholder value creation in the coming years.

Key Financial Highlights

• Revenue was ZMW2.6 billion (USD148 million) and we achieved a gross profit of ZMW853 million (USD49 million), respectively 19% and 15% above the prior year in kwacha terms, and up by 45% and 40% in US dollar terms, respectively. Performance improvements in USD terms was due to underlying performance and the appreciation of the kwacha (Average rate across the half year under review K17.34/USD compared to K20.98/USD in the previous corresponding period).
• The group delivered operating profit of ZMW230.5 million (USD13.2 million), equating to a growth of 49% in kwacha terms and 80% in USD terms, compared with ZMW154.8 million (USD7.4million) in HY2020.
• The Group’s strong performance was driven by performance in the Cropping and Milling divisions. Management continued optimising top line growth through revenue management initiatives while the continued cost control measures helped deliver strong Earnings Before Interest Taxes, Depreciation and Amortisation (EBITDA), and improved operating leverage.
• Market share gains in our feed milling business resulted in increased profitability and sustained margins while improved commodity pricing drove performance in our Cropping business.

For further information, please contact:
Zambeef Products plc
Walter Roodt, Chief Executive Office
Faith Mukutu, Chief Financial Officer
Tel: +260 (0) 211 369003

Fincap (Nominated Adviser and Broker)
Ed Frisby/Tim Harper (Corporate Finance)
Tim Redfern (ECM)/Barney Hayward (ECM)
Tel: +44 (0) 20 7220 0500

Autus Securities Limited
Mataka Nkhoma
Tel: +260 (0) 761002 002

About Zambeef Products PLC
Zambeef Products plc is the largest integrated cold chain food products and agribusiness company in Zambia and one of the largest in the region, involved in the primary production, processing, distribution and retailing of beef, chicken, pork, milk, eggs, dairy products, fish, flour and stockfeed, throughout Zambia and the surrounding region, as well as Nigeria and Ghana.

It has 236 retail outlets throughout Zambia and West Africa.

The Company is one of the largest suppliers of beef in Zambia. Five beef abattoirs and three feedlots are located throughout Zambia, with a capacity to slaughter 230,000 cattle a year. It is also one of the largest chicken and egg producers in Zambia, with a capacity of 8.8m broilers and 22.4 million day-old chicks a year. It is one of the largest piggeries, pig abattoirs and pork processing plants in Zambia, with a capacity to slaughter 75,000 pigs a year, while it’s dairy has a capacity of 120,000 litres per day.

The Group is also one of the largest cereal row cropping operations in Zambia, with approximately 7,787 hectares of row crops under irrigation, which are planted twice a year, and a further 8,694 hectares of rainfed/dry-land crops available for planting each year.

By Order of the Board

Mwansa M Mutimushi
COMPANY SECRETARY

LUSAKA, ZAMBIA 15 JUNE 2022

FIRST ISSUED ON 15 JUNE 2022

Related download

Unaudited results for the half-year period ended 31 March 2022 (LuSE).pdf

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