June 11, 2015

 

Zambeef's profit rises by 56%

 

 

 

Zambeef Products Plc has reported a 56% rise in profit in the six months to March 31, 2015, the first half of its financial year. The agribusiness conglomerate made a profit of ZMK75,000,000 (US$10,260) before interest, tax, depreciation and amortisation (EBITA).

 

Zambeef attributed the rise in earnings to strong sales of its cold chain meat and dairy products as well as tight control of administrative costs. The rise in profit came despite a 22% depreciation of the kwacha against the dollar during the period.

 

"The financial performance is significantly (better than) the same period in the previous financial period while Zambeef also concluded the sale of its subsidiary company, Zamanita Ltd, in line with the strategic aim of unlocking value and capital gains from within the Group and reducing the dollar gearing of the business," said chairman Dr Jacob Mwanza.

 

The company reiterated other strategic priorities including expanding production, processing, distribution and retailing of meat and dairy products in Zambia; forging crucial alliances and partnerships with major industry leaders; and developing the business into a regional food supplier.

 

"With Zambeef operating in some of the fastest growing parts of the world where populations and real incomes are rising, the demand for food will continue to show strong growth," Dr Mwanza added.

 

"Zambeef has a clear intention to be an important player in meeting this increased demand for food products. With the disposal of Zamanita, we are pleased that the management will be able to pay more attention on driving the core business of Zambeef."

 

"Increased focus on Zambeef's core business, which is the processing, distribution and retailing of cold chain meat and dairy products, has seen strong growth in these business units," Zambeef's joint chief executives, Carl Irwin and Francis Grogan, told shareholders.

 

In fact, the combined gross profit of beef, chicken, pork, milk, eggs and fish has increased by 48%. This part of the business will remain a priority in terms of capital expenditure and management focus.

 

Meanwhile, new projects in progress include a processing and distribution hub in Kitwe as well as wholesale depots in Solwezi, Mongu, and Lusaka.

 

The company also reported that its joint venture with RCL Foods Ltd of South Africa is progressing well. The joint venture involves a new hatchery, a breeder farm and a stock feed plant at Mpongwe Farm.

 

First day-old chicks will be introduced in September 2015 and start at around 220,000 chicks weekly before increasing to 320,000 over a 12-month period.

 

The new stock feed plant is expected to be operational before the end of the financial year.

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