Zambeef has announced it expects turnaround results for the year ending September 2019 with group revenue and income well over K3 billion and K18 million respectively following a half year “scare” following concerns of the impact of both macroeconomic factors and the forces of nature.
“In accordance with the Lusaka Securities Exchange Listing Requirements, the Board of Directors of Zambeef Products Plc hereby advises the Shareholders of the Group that the Earnings per Share for the financial year ended 30th September 2019 is expected to be approximately 73% higher (in Kwacha terms) than the corresponding period last year for the Group”, read a statement issued on SENS by the company’s sponsoring broker, Pangea Securities in Lusaka, Zambia on 6th December 2019.
Six months ago, ZAMBEEF forecast a decline in its earnings per share for the first six months of its current financial year due to a myriad of challenges that the agri-processing company has faced thus far. The company which is an integrated cold chain foods and retail business with operations in Zambia, Nigeria and Ghana announced through its website that “revenue for the Group increased by 15.5% in Kwacha terms (down 4% in USD terms due to exchange losses).
Fast forward to present day, following announcements of disposal of the Sinazongwe Farm for USD10 million and appointment of a new Chief Financial Officer and new Director on the Board in September, and the cropping segment reporting exceeded expectations in October, the ZAMBEEF group stands to publish financial results that are positive but also signal the astute leadership of the board and management team.
At full year, the elements they identified as potential setbacks of the group’s performance are still present and more amplified. “The financial year ended 30 September 2019 proved to be a challenging year amidst a regional drought and macroeconomic headwinds” further read the published statement. “The weakening of the Zambian Kwacha against the USD, an increase in the cost of fuel together with strained electricity supply impacted not only on Zambeef’s performance but also the customers’ spending power”.
According to the company, despite the challenges noted above, the group has achieved significant growth. “This achievement, in the face of such economic and market difficulties, illustrates the Group’s fundamental strengths as a diversified and resilient business”. The Board Chair Dr Jacob Mwanza had signaled to the market following the announcement of the Sinazongwe Farm sale in a statement that has been the rhetoric of the CDC Group inspired board, the focus would be on the group’s core business. The UK’s development finance institution, the CDC Group acquired a 17.5% equity stake in Zambeef Products for US$65m in 2016 and has been instrumental in the strategic refocus of the company.
“This Transaction is in line with and a continuation of the Group’s strategic vision, which will allow Zambeef to focus on growing its core business, which is the production and retailing of cold chain meat and dairy products and stock feed, delivered through the Group’s extensive processing, distribution and retail network”, read the Board Chair’s statement following the announcement of the Sinazongwe disposal. “Furthermore, the Transaction will allow Zambeef to continue to reduce its overall gearing, and in so doing, reduce interest costs.”
“The Group intends to announce its results for the financial year ended 30 September 2019 on 9 December 2019. The results expect to report revenue of K3,134,967,000 (US$254,462,000) and a Group income for the year of K18,494,000 (US$1,501,000)”.
