In accordance with the requirements of the Securities and Exchange Act No. 41 of 2016, Zambeef Products PLC announces its results for the half-year period ended 31 March 2021.

Performance Overview

• The Group had a strong start to the financial year, delivering results ahead of pre-pandemic levels. Demand for products, particularly poultry products, remained strong allowing the Group to remain in line with revenue expectations. The cost containment embarked on by management also continues to yield significant savings and contributed positively to the results.
• Improvements in the load shedding situation, following the good regional rains, resulted in reduced generator fuel expenditure and improved production efficiencies.
• Notwithstanding, the half year period continued to present challenges in the operating environment, resulting from the Covid19 pandemic and the previous 2020 economic uncertainties, despite greater stability compared to the second half of the 2020 financial year. The rising inflation put pressure on consumer disposable incomes and reduced the share of wallet going towards food spend.
• Supply constraints on some of Zambeef’s product lines further put pressure on the cost of inputs.

Strategic focus

• Our strategic focus is to optimise our asset utilisation and maximise returns. We remain committed to our strategy of focussing on our core businesses, in which we strive to be the best in class. The continued deleveraging and divestiture of non-core assets will enable us to free up cash to invest into our core businesses and therefore deliver shareholder value.

Outlook

• Although we expect the macroeconomic situation to remain volatile, we expect more stability in the medium term than we experienced in the second half of 2020. Copper prices have rallied following the global recovery from the economic downturn caused by the coronavirus pandemic. The Covid-19 pandemic and how it evolves will continue to be an important factor in how we perform for the remainder of the year. We believe that a healthy, sustainable and profitable growth trend can only be achieved when we work together with our partners, communities and customers. We remain committed to implementing and enforcing Covid-19 protocols in our outlets.
• Despite the macro-economic headwinds and uncertainty caused by the Covid-19 pandemic, Zambeef’s underlying performance is expected to remain resilient.
• Rehabilitating our balance sheet remains a priority. We have focused on deleveraging that demonstrates a clear path to repayment of debt as it matures,

Key Financial Highlights

• Revenue was ZMW2.2 billion (USD102.5 million) and we achieved a gross profit of ZMW739.4 million (USD35.2 million), respectively 21% and 22% above the prior year in kwacha terms, but both down by 21% and 22% in US dollar terms, respectively.
• The group delivered operating profit, including discontinued operations, of ZMW175.6 million (USD8.37 million), equating to a growth of 51.3% in kwacha terms and a flat performance of 0.3% in US dollar terms, compared with ZMW116.1 million (USD8.35million) in HY2020.
• The Group’s strong performance was driven by growth in the Poultry, Retail and Cropping divisions. Management continued optimising top line growth through revenue management while the continued cost control measures helped deliver strong Earnings Before Interest Taxes, Depreciation and Amortisation (EBITDA).
• Despite being slightly lower than prior year, exchange losses and financing costs remained high in kwacha terms, eroding bottom-line performance. The depreciation of the kwacha led to increased financing costs and exchange losses on our dollar denominated debt, notwithstanding continued principal repayments during the period.

For further information, please visit www.zambeefplc.com or contact:

By Order of the Board

Mwansa M Mutimushi
COMPANY SECRETARY

Related download

2021 March HY Financial Results.pdf

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