Zambeef interim results presentation for the Half Year ended 31 March 2020

June 24th, 2020

Outlook

Macro Economic factors

Zambia is forecasted to experience its first recession in more than 20 years with GDP growth forecasted to be -3.0% in 2020

Electricity supply is expected to stabilize with reduced load-shedding hours in H2

  • Over dependence on Hydro-electric power supply which is susceptible to climate change and seasonal variations

Zambian Kwacha depreciation

  • Less volatility but continued steady depreciation in H2
  • External debt repayments looming
  • Constrained demand for copper
  • Copper prices have started showing an upward trajectory

COVID-19 pandemic

  • BOZ reduced the Monetary Policy Rate (MPR) by 225 basis points to 9.25 to mitigate COVID-19 impact
  • Government regulations are geared toward acclimating with COVID – 19 and we anticipate the full resumption of country operations in H2
  • The impacts of the pandemic still pose a significant risk to the business.

Inflationary pressures anticipated to persist in the second half of the year

Despite the MPR reduction, liquidity constraint is expected to continue in H2 due to high inflation and relatively higher interest rates

Strategy Initiatives
Management remains committed to focusing on its core divisions to generate cash flow that will be channelled towards deleveraging the Group. Our plans are underpinned by:

– Continued capital investment prioritising the best returning projects
– Cash generation through improved margins, cost control and working capital management
– Continued divestment of non-core assets
– Environmental and food safety improvement projects

Related download
2020 March HY Results Presentation.pdf