Zambeef abridged results presentation for the Full Year ended 30 September 2020

January 4th, 2021

Financial Highlights

Operating Profit Growth Driven by Management efficiencies

– Combined Retail & CCFP and Stockfeed revenue on prior year were principle drivers for the observed 24% revenue increase. Combined, they contributed to 82% of the observed revenue
– USD revenues declined as growth metrics observed in the Retail & CCFP divisions were eroded by the depreciation of the local currency.

Gross Profit
– Gross Profit margins in the cropping division came under pressure due to the increase in the cost of USD priced inputs and persistent load shedding.
– USD Gross Profit was further strained as eroded Retail & CCFP revenue growth was partnered with a 1% reduction in margins.

Operating Profit
– The Stockfeed division and our Other business units recorded operating profit growth of 73% and 64% on prior year in kwacha terms owing to efficient management of overhead costs and effective asset utilization.
– Losses made on USD Gross Profits were mitigated by lower central overheads as well as USD denominated Stockfeed growth.

Operating Environment | Outlook

Economic Growth
– The Global economy is expected to contract by 4.9% on account of the impact of COVID-19.
– The Zambian economy is projected to contract by 4.2% in 2020 with slight recovery 2021.

– Inflation is expected to remain above the10% target ceiling due to increased expenditure by government.
– Depreciation of the local currency remains a key driver of inflation.
– Overall depreciation for the 2021 calendar year are expected to remain volatile.

Exchange Rate
– Key drivers of local currency depreciation are:
– Demand for crude oil
– Debt servicing obligations

Interest Rates
– In line with deteriorating loan demand, we anticipate interest rates to decline further despite high inflation.

– MPR maintained at 8% to stimulate financial growth and assist private sector credit.

Related download

2020 September FY Results Presentation.pdf