Performance Overview

• Despite the rising input costs and global food prices, the difficult operating environment as a direct result of the 2020 economic and Covid-19 related uncertainties, the sustained consumer demand for the Groups products has driven positive full year performance.
• The macroeconomic fundamentals remained relatively stable during the financial year in the context of the previous period. The local currency depreciated at a much slower rate in the first half and experienced steep appreciation in the second half. Increased consumer spending stemming from government dismantling of local arrears and Covid-19 economic stimulus package resulted in increased demand for our products
• The Group generated an operating profit, including profit from asset held for sale, of ZMW299.3 million (USD14.1 million) compared to ZMW212.1 million (USD13.1 million) in the prior financial year. The operating profit excluding profit from asset held for sale was ZMW267.3 million (USD12.6 million) compared to ZMW210.5 million (USD13.1 million) achieved in the previous financial year. Profit before tax was ZMW203.9 million (USD9.7 million) compared to a loss before tax of ZMW22.7 million (USD1.4 million) achieved in the prior financial year. The Group’s performance in the face of headwinds illustrates the strength of our vertically integrated business model, the strength of our brands and a good management team.

Strategic focus

Zambeef’s management remains committed to implementing the new five-year business strategy which is underpinned by the following pillars:

• Focus on and strengthen our core business by investing in capacity and grow market share
• Divestiture of non-core assets to free up resources
• Develop a human capital strategy that aligns with business objectives
• Strengthen our strategic partnerships

Key Financial Highlights

• Revenue and gross profit increased by 28% and 21% respectively in Kwacha terms for the group due to the focus on revenue optimisation across most product lines. However due to the depreciation of the Zambian Kwacha, the metrics in USD reduced by 2% and 7% respectively in comparison to 2020.
• Despite an inflationary environment and exceptional costs in the numbers, Managements continued focus on cost control measures ensured administration and distribution expenses were contained within inflationary levels and only increased by 20% (Inflation averaged 21.7% for the period) from ZMW 1 billion in the previous corresponding period to ZMW1.2 billion in the period under review.
• Finance costs reduced by 4.4% in USD following repayments of principal amounts on long term loans. During the period under review, management took steps to restructure the company’s debt profile by replacing USD debt with Kwacha debt to match the debt profile to the revenue profile and thus reduce foreign exchange risk, which should help provide predictability to the bottom line going forward. The USD to ZMW debt mix now stands at 15%:85% compared to 80%:20% at the end of the previous financial year. The Group benefited from the central bank’s Covid-19 relief fund with favourable interest rates.

Outlook

The macroeconomic environment is expected to remain stable. The successful holding of general elections on 12 August 2021 and the resultant change in government and peaceful transition has brought investor confidence and optimism.

Despite the macro-economic headwinds and uncertainty caused by the Covid-19 pandemic, Zambeef’s underlying performance has been and is expected to remain resilient, improving as the economic situation improves.

Our deleveraging strategy and debt profile reorganisation will help relieve exchange losses and financing cost pressures to the bottom line, which will increase free cash flow to enable us to invest in the future.

We remain committed to implementing and enforcing Covid-19 protocols in our outlets while driving the vaccination of all our employees. We believe that a healthy, sustainable and profitable growth trend can only be achieved when we work together with our partners, communities and customers to curb infections through the observation and implementation of safety protocols.

For further information, please contact:

By order of the Board

Mwansa Mutimushi
Company Secretary
Issued in Lusaka, Zambia on 18 November 2021

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 30 NOVEMBER 2021

• Zambeef 2021 September FY Financial Results (LuSE).pdf

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