Zambeef (AIM: ZAM), the fully integrated agribusiness with operations in Zambia, Nigeria and Ghana, is pleased to provide a further update on its performance for the year ended 30 September 2015 (“FY14/15”). An update on the Group’s US Dollar (“USD”) debt position is also included in light of the recent macro-economic challenges facing many African countries, including Zambia, and the recent volatility of Zambeef’s share price on AIM. This update follows the announcement made by the Group on 30 September 2015. The FY14/15 audited results are expected to be announced on 25 November 2015.

In pursuit of the strategic priority to reduce its net debt position, as set out in the 2014 annual statement, Zambeef is pleased to report significant progress. Net debt at 30 September 2015, stated in USD, was USD74.7m, a reduction of USD 43.3m from the USD 118.0m as at 30 September 2014. Debt reduction continues to be a major strategic priority.

During the year, the Group has been actively working at converting its USD denominated debt to Zambian Kwacha (ZMW). Whilst USD debt carries a significantly lower interest cost than ZMW debt, it carries with it significant risks from exchange rate movements – during this financial year, the ZMW has approximately halved in value against the USD (depreciating from approximately ZMW6.27 to ZMW12.02 per USD). At 30 September 2014, 71 per cent of Group debt was in USD. At 30 September 2015, this had reduced to 65 per cent and, since the year end, this has reduced further to approximately 55 per cent. The Group continues to look at ways of reducing exposure to the US dollar even further in order to mitigate future earnings volatility arising from exchange rate fluctuations, whilst also seeking to preserve the most efficient capital structure.

By way of update to Zambeef’s 30 September 2015 announcement, Group USD revenue (unaudited) invoiced in USD was USD39.7m representing approximately 15.5 per cent of total Group revenue. Zambeef continues to increase the range of products it exports into the Southern African Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA) regions and expects this USD revenue to continue to grow during the coming year.

As previously notified, we expect that FY14/15 operating profits and cash generated from operations will be ahead of market expectations while adjusted profit before tax will be in line with market expectations, despite absorbing significant realised losses from repaying US Dollar debt and converting US Dollar debt to ZMW.

In the first month of the current financial year it is encouraging to see continued robust demand in our core markets (retailing of cold chain meat and dairy products). As a result, we continue to expect growth in revenues and profits in ZMW terms in the current financial year.

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