ZAMBEEF – 2016 Half Year Review
Agriculture, Retail, Zambeef Products Plc

As the 2016 Zambian presidential election results strolled in, many of our readers were busy tucking into Zambeef’s products. The quality of their products resonates with their 2016 half year performance. What stood out from the interim report is how well the vertically integrated company performed operationally. They continue to focus on their core business albeit now seek to dominate every aspect of the food value chain with their aggressive opening of micro outlets to get more of their product to the masses (Zambeef in your face). No doubt a lot of their current success can also be attributed to stable kwacha during the period under review (reduction in exchange losses).

Stock feed was their biggest value creator with sales of $9.2m representing a 133.4% increase from the previous year. Operating profit increased by 72% with earnings celebrating a 366% bounce back from negative territory in 2015.  EBITDA was up 32.7% confirming management’s intension to pursue a cost control strategy (volatile EBITDA signals out of control costs). Furthermore, there was a 21% downward movement in their gearing signaling a move away from long term debt. Interesting is 24% reduction in non-current assets which inadvertently improved the company’s return on fixed assets.

The company envisions a stronger operating performance in the second half of 2016. Critical to this will be a stable currency and controlled inflation. Post-election sentiments indicate that the will be stability in the financial sector making it prime season for Zambeef to continue to create value as they focus on being a regional food supplier. However, keeping an eye on the IMF program on agriculture will be important. Internationally, Zambeef is set to make more strides as its partner Shoprite opens up more stores in West Africa further expanding their footprint. All things considered, yearend will be period for shareholders.

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