Dairiboard Holdings Limited, says its volumes sold in foreign currency grew by 186 percent in the first quarter to March 2022.
This comes as the firm enhances its foreign currency generation strategy.
According to Dairiboard, this led foreign currency acquired volumes to account for 40 percent of the firm’s total volumes, up from 17 percent recorded in 2021.
Of the Dairiboard’s 40 percent sales volumes in foreign currency, 32 percent were realised from domestic sales up from 13 percent in 2021 while exports contributed eight percent.
This drove Dairiboard’s overall foreign currency revenues to improve by 182 percent.
“The business maintained the focus on foreign currency generation to improve the capacity to procure raw and packaging materials. Resultantly, volumes sold in foreign currency grew 186 percent,” said Dairiboard in its quarterly trading update to March 2022.
In the period under review, Dairiboard’s total sales volumes grew to 23 million litres which were 17 percent ahead of 2021 volumes while foods and beverages uptake improved by 29 and 31 percent respectively.
Volumes for raw milk used by processors surged to close the quarter 33 percent above the prior comparable period.
However, liquid milk sales declined by four percent due to plant renewal on the UHT line.
Overall Dairiboard’s revenue for the quarter recorded a 129 percent growth to $3, 9 billion ahead of the same period last year attributable to decent pricing and volume performance while operating profit grew by 48 percent compared to the prior year.
Dairiboard noted that operating margins remained under pressure due to high input costs of both domestic and foreign supplies.
The listed milk processor, however, indicated that poor rainfall witnessed during the 2021/22 summer cropping season, coupled with mounting inflationary pressures, are likely to have a negative impact on the industry performance and economic growth.
“During the quarter, the operating environment was marred by rising inflation which was a product of imported inflation, exacerbated by the Russia – Ukraine. Farmers were not spared from the inflationary impacts of increasing costs of fertiliser, fuel, and other inputs.
“The lower than expected rains in the 2021/2022 agricultural season has curtailed the economic prospects and projections for the industry in 2022,” said Dairiboard.
According to Agritex, most areas received below normal rainfall compared with the long-term average and farmers are likely to lose the bulk of their crops leading to a below-average national production, which is likely to push the country to import more cereals and grain.
On the other hand, Inflation has been on a spiral as March recorded a 72 percent rise on year-on-year inflation whilst statistics at the end of April pointed to a 96,4 percent surge in April inflation.
This sustained rise in inflation since the beginning of the year is likely to impede the central bank’s and government’s forecast to reduce inflation levels to about 20 percent by the end of 2022 a position that has a strong bearing on the country’s economic growth.
The International Monetary Fund (IMF) has projected Zimbabwe’s economy to grow by 3.5 percent in 2022, down from 6.3 percent recorded in 2021 while the Reserve Bank of Zimbabwe (RBZ) and government have pegged the 2022 growth estimate at 5.5 percent.