Listed food and beverages manufacturer, Dairibord Holdings, earned a net profit after tax of $689 million in the financial half year ended June 30 2022.
The performance saw the group switch back to profitability from the comparative 2022 period.
Total revenues rose 40 percent in inflation adjusted terms to $17,1 billion, as beverage sales comprised the majority of the group’s revenue at $8,7 billion.
Food product sales showed the highest inflation adjusted growth after doubling to $3,8 billion while growth in milk sales was subdued at 3 percent to $4,5 billion.
“This affirms the growing contribution of non-milk product categories and product portfolio diversification, in line with our ‘more than just milk’ strategy,” the milk processor said.
Dairibord Holdings noted that raw milk intake by processors increased by 17 percent to 38,96 million litres in the first half of 2022. The group’s intake of 12,2 million litres represented 32 percent of the country’s milk production, which was a moderate decline but remained the largest among processors.
Despite the declining intake, the group’s overall sales volumes gained 11 percent during the period to 47 million litres. The outcome was attributed to the groups product diversification strategy geared towards easing reliance on milk sales.
Total assets stood at $16,6 billion and total liabilities reached $7,3 billion and Dairibord noted that it had foreign currency obligations of US$4,6 million, but assured that most of the liabilities were covered by foreign currency denominated assets and expected disbursements from foreign exchange auction allotments.
“Foreign currency obligations were at US$4,3 million, including a long-term loan of US$0,66 million,” said the company’s chairperson, Josphat Sachikonye, in a statement accompanying results.
“Most of the obligations were adequately covered by foreign currency assets and expected disbursements of outstanding allotments from the auction market.”
Going forward, the group highlighted its concerns about the country’s erratic power supply and high cost of borrowing.
The group added that, “Our main focus will be increasing food and beverages sales, as well as cost containment. The volume growth is expected to be driven by the commissioning of new processing capacity and equipment in the third quarter. The group also said that it will realign its marketing channels to increase cash receipts, local USD and export sales.”
The group did not declare a dividend.
On the ZSE, the Dairibord Holdings share has been particularly hit by bearish market. Among a selection of other listed companies involved in the food and beverages sectors, the share is the worst performing. Since the start of 2022 the share has lost 39 percent value in nominal terms and 89 percent in implied US dollar terms.
The share is currently trading at an estimated price to book ratio of 0,5 times.