Press Release (AIM) – Half Year Results 2017

June 7th, 2017

Zambeef (AIM: ZAM), the fully integrated cold chain foods and retail business with operations in Zambia, Nigeria and Ghana, today announces its unaudited interim results for the six months ended 31 March 2017. Below is an extract from the financial results.

Financial review

The first six months of the 2017 financial year have seen the Zambeef business continue to grow, but margins have remained under significant pressure. Turnover for the Group increased by 3.5 per cent. in ZMW from ZMW1,122 to ZMW1,161m (19.8 per cent. in USD), while Gross Profit margins reduced from 40 per cent. to 33 per cent., resulting in Gross Profits reducing by 15.3 per cent. in ZMW from ZMW446m to ZMW378m (2.02 per cent. in USD).. The Group has tightly controlled its overheads despite the inflation rate starting the period at 18.9 per cent., and overheads increased by only 1.8 per cent. in ZMW (17.7 per cent. in USD). EBITDA margin reduced from 14.1 per cent. to 7.3 per cent., and operating profits decreased by 64 per cent. in ZMW from ZMW122m to ZMW44m (58 per cent. in USD from USD10.7m to USD4.5m)…

The highlight of this period was the strong 26.1 per cent. (in ZMW) sales growth in the Retail and Cold Chain Food Products division. Zambeef has firmly established itself as best-in-class in terms of its production and distribution of the Cold Chain Food Products delivering a very satisfactory EBITDA margin of 8.5 per cent. which compares favourably with benchmark returns across the cold chain foods and retail sector, in what has been a challenging macroeconomic environment.
The focus for the next six months will be on:

  • Continuing to expand the footprint and sales of the Retail network, which will drive sales of our Cold Chain Food Production business and stock feed operations. (Eight Zambeef Macros and four Shoprite stores are expected to open before the end of the financial year);
  • Commissioning the new Kitwe Cold Chain Food distribution hub which will increase capacity and improve distribution efficiencies in the Copperbelt and North Western Province operations (completion expected September 2017);
  • Completing the expansion of the broiler breeding farms and hatchery to increase day-old chick production from 210,000 birds per week to 310,000 birds per week (completion expected end of May 2017);
  • Expand the broiler processing operations to increase production by 30,000 birds per week to 160,000 birds per week (completion expected end of June 2017); and
  • Commission the new stock feed plant at Mpongwe to bring an additional 140,000 M.T. of stock feed capacity on line (completion expected July 2017).

It will be a busy period but with an improvement in the macroeconomic environment Zambeef can expect to grow the business and improve margins over the next six months…

Related downloads

2017 March HY Financial Results (AIM).pdf
2017 March HY Results Presentation.pdf

One Comment

  1. wrote on June 8th, 2017 at 12:19 pm

    Paul Weeks

    Although I am disappointed by the 1/2 year results, I am optimistic that the board will overcome the latest challenges thrown at the company as it operates in a area of the world where economic stability including low inflation and low interest rates are a luxury, taken for granted here in the UK (for the moment).

    I think the company is really due a period of prosperity considering how much effort seems to be put in to running this business. As I am in the food industry and from an agricultural background I know some of the challenges the directors face each day. Add in their world location for growing, marketing and selling their produce and they do pretty well. The government and population of Zambia are lucky to have this business and should cherish it.