By JUDITH NAMUTOWE –
ZAMBEEF Products Plc operating profit has risen from K56.2 million last year to K162 million this year.
The increase by a margin of K106 million represents a 189 per cent growth in operating profit for the financial year ending September 30, 2015.
Profit before tax excluding exchange losses increased by 728 per cent to K107 million, equivalent to US$15 million.
Joint chief executive officer Carl Irwin said strong performance in Zambeef’s core business of cold chain food production and distribution helped propel the growth.
“Despite significant macro-economic challenges, the Group’s performance was commendable, particularly in our core cold chain food products business and we look forward to further growing into a regional food supplier both in the Southern African Development Community and Common Market for Eastern and Southern Africa,” Mr Irwin said.
Zambeef’s core cold chain food products division performed exceptionally well, recording an increase in gross profits of 29.1 per cent in Kwacha terms.
Mr Irwin said the division’s growing retail network now totals 150 outlets from the previous 139, and continues to play a vital role in enhancing operations of the division.
The division, which includes production, distribution and retailing of beef, chicken, pork, fish, dairy products and eggs, was expected to drive the growth of Zambeef in 2016 with more outlets planned by the company through its partnership with Shoprite.
Mr Irwin explained that the focus on cold chain products helped the company record a rise of 223 per cent in cash generated from operations which rose from K81.6 million to K263.8 million.
The large cash inflow from operations as well as the sale of the Group’s ZAMANITA edible oils division for $27 million to Cargill during the year resulted in Zambeef reducing its term debt by $21.2 million and its working capital facility by $25 million.
The total net debt in dollar terms was reduced by $46.2 million to $72.3 million, from $118.5 million in 2014.
Joint chief executive officer, Francis Grogan said the group converted a significant amount of its US dollar denominated debt into Kwacha in order to mitigate future currency exchange exposure.
“The year has seen a renewed focus by Zambeef on its cold chain food product operations. These are cash generating operations that will form the cornerstone of Zambeef’s future success,” Mr Grogan said.
Zambeef has had a successful operational year despite challenges in the economy and retains a positive outlook towards its operations.
The firm has set sights on continuing to grow its operations in the next financial year.