Innscor Africa – Unaudited Abridged Group Financial Results for HYE 31 December 2023

By Published On: March 21st, 2024Categories: Corporate announcement, Earnings
Innscor Africa Limited 2024 Interim Results For The Half Year

Innscor Africa Limited (INN.vx) HY2024 Interim Report


The Holding Company’s Directors are responsible for the preparation and fair presentation of the Group’s unaudited abridged consolidated interim financial statements, of which this press release represents an extract. These unaudited abridged Group consolidated interim financial statements are presented in accordance with the disclosure requirements of the Victoria Falls Stock Exchange (“VFEX”) Listing Requirements and, except where stated, in accordance with the measurement and recognition principles of International Financial Reporting Standards (“IFRS”) and the manner required by the Companies and Other Business Entities Act [Chapter 24:31]. Except where stated, the principal accounting policies applied in the preparation of these unaudited abridged consolidated interim financial statements are consistent with those applied in the previous period’s financial statements. There is no impact arising from revised IFRS, which became effective for the reporting period commencing on or after 1 January 2023, on the Group’s unaudited abridged consolidated interim financial statements.


As advised in previous periods, there have been substantial changes in the currency environment in Zimbabwe in recent years, including the reintroduction of the Zimbabwe Dollar (“ZWL”) as the Country’s functional currency in February 2019 through Statutory Instrument (“SI”) 33 of 2019, followed by the promulgation of SI 185 of 2020, which reintroduced the use of foreign currency for domestic transactions. These significant changes have created numerous uncertainties in the treatment of taxes due across the economy and have been compounded by a lack of clear statutory and administrative guidance or practical transitional measures from the tax authorities. The wording of existing tax legislation has given rise to varying interpretations of tax law within the Country. Over time, it has become apparent that the Group’s interpretation of the law regarding the currency of settlement for taxes, as well as the methodology for tax computation, has differed from that of the authorities, and this has resulted in a number of uncertainties in the Group’s tax position. The Group continues to seek adjudication by the courts on these matters.


Pursuant to section 3 (1) (h) of Securities and Exchange (Victoria Falls Stock Exchange Listings Requirements) Rules, 2020 (“the VFEX Listing Rules”), the VFEX issued Practice Note 2 on Sustainability Information and Disclosure, which came into effect on 1 January 2024. Practice Note 2 introduced the mandatory requirement of specifically identified disclosures from the Global Reporting Initiative (“GRI”) sustainability reporting protocol. The Group currently utilizes the Zimbabwean Endorsed (“ZWS”) International Standard ISO 26000 (“ZWS ISO 26000”) guidance on social responsibility frameworks to integrate social responsibility into its values and practices. The Group’s most recent Sustainability Report exhaustively captures all areas of sustainability reporting under ISO 26000 as its foundation, and work is currently underway to ensure that the current year’s Sustainability Report conforms to both the ISO 26000 and GRI standards.


The operating environment remained challenging and complex for much of the period under review, notwithstanding the positive policy announcements regarding extending the multi-currency system until 2030, and ongoing efforts to enhance the monetary policy frameworks. The economy still faces acute liquidity constraints, local currency volatility, and inflationary pressures, which were especially prevalent toward the latter part of the six-month period ending 31 December 2023.

Despite the macroeconomic environment, the Group delivered pleasing volume growth across most business units against the comparative period, driven by a sustained recovery across the Mill-Bake value-chain, supported by firm demand in the Protein, Beverage, and Light Manufacturing segments, which all benefited from investment activity targeted at capacity building, product extensions, and venturing into new categories. In the six-month period under review, the Group has also been actively focused on building capacity within the sales and distribution functions of consumer-facing business units and these route-to-market initiatives have been central in delivering improved volume performance.

The Group remains resilient in ensuring its business models are optimized for the prevailing trading environment, supported by a drive to ensure economies of scale are unlocked across the value-chain, with the objective of attaining affordable consumer pricing for all its products. Working capital efficiency and free cash flow generation remain paramount in ensuring optimal liquidity management, and to support the Group’s capital expansion and optimization initiatives in the forthcoming period.


As previously reported, the Group changed its reporting and functional currency from ZWL to United States Dollars (“USD”) with effect from 1 July 2022. In line with this change, the comparative period interim report was prepared in USD based on management’s best interpretation of IFRS and the economic conditions prevailing at that time. Additional information was obtained in the period following the issuing of the comparative period interim report, which allowed for fairer presentation of the Group’s financial results for the 2023 financial year in the new functional currency. To ensure consistency and comparability, and taking account of this additional information, the Group’s comparative interim financial statements have been restated. There is no change to the Group’s full year comparative financial statements as contained in its Annual Report for the 2023 financial year.

The Group recorded revenue of USD 480.409 million for the six-month period under review, representing a 20.2% growth over the comparative period. Revenue growth was underpinned by improved capacity utilization across the Group’s core manufacturing entities, supported by the introduction of new product categories, category extensions, route-to-market optimization, and an acute focus on pricing strategy to ensure affordability and convenience to the consumer.

At an operating profit before depreciation, amortization, and fair value adjustments (“EBITDA”) level, the Group saw a contraction in margin of 3.7%. This resulted mainly from the reduced gross margin yield, where increased cost push pressure experienced during the period, within the bill of materials, was not fully passed on through pricing. In addition, operating expenditure saw a persistent rebasing effect during the period, most notably within electricity and staff costs. During the period, the Group has also invested considerably in the selling and distribution functions within certain key businesses, which have driven the volume and revenue performance for the Group, albeit from a marginally higher cost base. EBITDA closed at USD 50.771 million, representing a 10.7% contraction versus the comparative period.

Financial income for the period of USD 2.874 million is largely attributed to net foreign exchange gains on various currency holdings; this was an improvement on the USD 1.850 million expense recorded in the comparative period. The depreciation and amortization increased by 15.8% over the comparative period on account of the extensive capital investment undertaken in the prior periods, showed some efficiency improvement compared to the revenue growth recorded.

Fair value adjustments of USD 5.980 million emanate mainly from the Group’s significant biological asset holdings in the Protein Segment, and the application of the provisions of IAS 41 (Agriculture), which require the realized cost of sale of agricultural produce to be fair valued.

The Group’s interest expense for the period under review was USD 4.442 million; this was a significant reduction over the comparative period charge of USD 9.091 million, which was characterized by significant increases in interest rates on local currency borrowings.

The Group’s Associate businesses delivered positive earnings through the equity accounted earnings line, with pleasing growth realized over the comparative period.

Profit Before Tax (“PBT”) amounted to USD 45.161 million, was an increase of 15.4% over the comparative period, as the trading dynamics to an EBITDA level were offset by an improved performance in the financial income, a reduced interest charge, and an enhanced contribution from the Group’s Associate businesses.

The higher effective tax rate recorded in the period under review was largely a result of the necessary deferred tax charge that was processed to uplift the Group’s deferred tax provision for it to be reflective of the newly revised corporate income tax rate, which increased from 24.72% to 25.75%; this additional once-off “corrective” tax charge amounted to USD 1.437m.

Current period Headline Earnings Per Share (“HEPS”) of 4.14 US Cents closed marginally ahead of the 4.13 US Cents per share recorded in the comparative period.

The Group’s Statement of Financial Position remained robust, with a strong asset base supported by fixed assets and efficient working capital positions. Net gearing declined to 6%.

From a cash flow perspective, earnings quality was extremely solid and was further supported by improved efficiency across the Group’s working capital positions, combining to deliver USD 57.718 million of cash available from operations for the current period under review; this was a similar level to that recorded in the comparative period. The ongoing positive operating cash flows enabled the Group’s extensive investment programme to continue, with USD 32.775 million deployed toward ongoing capital expansion projects during the current period under review.



This reporting segment comprises the Group’s Bakery division, National Foods, Nutrimaster, and its non-controlling interests in Profeeds.

The Bakery division recorded volume growth of 23.3% over the comparative period on account of consistent wheat pricing and innovative route-to-market initiatives, which saw the scaling up of country-wide express shops during the period under review, coupled with continued investment to replace the existing bread distribution fleet.

The new state-of-the-art Bulawayo factory reached full capacity during the latter part of the period under review, unlocking production efficiencies, and enhancing the loaf quality and consistency in the Southern region. Investments that targeted further automation within the Harare operations were also recently commissioned.

National Foods registered an aggregate volume growth of 3.4% over the comparative period, driven by a recovery in Flour volumes and continued momentum in the Stockfeeds business:

  • Flour volumes increased 5% over the comparative period on the back of improved demand in the baker’s flour category, enhanced by pricing stability in the wheat-to-bread value-chain. The comparative period was characterized by elevated global grain prices.
  • The Stockfeed business unit registered excellent results for the period under review, with volumes growing by 14% over the comparative period, supported by sustained demand in both the chicken and beef feed segments.
  • Overall volumes within the Maize business unit closed marginally behind the comparative period; however, demand for premium maize meals under the “Pearlenta” brand remained firm, with volumes closing 7% ahead of the comparative period. The “Red Seal” and “Better Buy” roller categories faced increased competition from decentralized millers and duty-free imports; this was exacerbated by pricing distortions in the formal trade. As a result, volumes in this category closed marginally behind the comparative period.
  • The Down-Packed unit had a challenging six months. Overall volumes in the business contracted by 17% versus the comparative period, largely due to a ban on the export of rice from India, which was introduced in July 2023.
  • The Snacks business operated at capacity for the period, delivering a pleasing 31% volume growth over the comparative period. Investments to increase the capacity of both hard (“Zapnax”) and soft snacks (“King Kurls”) have been undertaken and will add additional capacity to the business in the second half of the financial year.
  • Current period volumes in the Cereals business unit closed 7% ahead of the comparative period. Intense focus is being placed on optimizing route-to-market strategies to realize the full potential of the “Nutri Active” breakfast cereal and “Pearlenta” instant porridge range in the forthcoming quarters.

Work on the construction of the new pasta and biscuit plants continued during the period. The pasta plant was commissioned at the end of February 2024, and is the first large-scale pasta plant to have been constructed in Zimbabwe. The new biscuit line is expected to be commissioned in March 2024.

Profeeds continued to operate at full capacity for much of the period under review and delivered volumes 4% ahead of the comparative period. The Harare factory operations incurred a material silo collapse toward the latter part of the period, which rendered one of the operation’s two production lines inoperable. The business has quickly recovered volume momentum via outsourcing arrangements following the incident. Coupled with the Harare factory rebuild, the business is expediting the Bulawayo stockfeed factory investment, which is expected to be commissioned before the close of the current financial year.

Aquafeeds, a subsidiary of Profeeds, delivered solid volume growth of 63% over the comparative period, concentrated mainly in fish feed, with strong growth realized in both the export and local small-scale fish farming segments.

Within the “Profarmer” retail chain, total stockfeed volumes through the channel increased 9% over the comparative period, supported by a 42% increase in sales of fertilizer and ancillary products over the same period. Five additional stores were opened in the period, bringing the current store network to 57.

At Nutrimaster, fertilizer volumes closed 77% ahead of the comparative period, supported by a strong order book and extension into the tobacco and horticulture segments, coupled with firm demand in the small-scale farming segment.


This reporting segment comprises Colcom, Irvine’s, and Associated Meat Packers Group (“AMP”), which includes the “Texas Meats,” “Texas Chicken,” and “Texas Dairy” branded store networks.

The Colcom division, comprising Triple C Pigs and Colcom Foods, continued to deliver excellent results for the period under review. At Colcom Foods, consumer demand within the fresh pork category remained firm, with volumes growing by 5% over the comparative period; this was supported by a pleasing recovery in the small caliber polonies category, where volumes grew 23% over the comparative period. Volume growth across the sausage, bacon, and ham categories, which rely on formal retail channels, remained muted against the comparative period.

At Triple C Pigs, overall volumes closed at levels similar to those recorded in the comparative period. Investment into enhanced genetics and improved rearing sites, coupled with the recent commissioning of an on-farm stockfeed mill, should result in improved operational efficiency in the periods ahead.

The business has commenced a significant, all-encompassing investment drive, which will see capacity extensions in the upstream piggery operations, coupled with a continued focus to modernize the Colcom Foods Coventry Road factory.

At Irvine’s, volume growth was realized in the day-old chick and frozen chicken categories, growing 4% and 8%, respectively, ahead of the comparative period. Demand for table eggs remained firm throughout the period, and the category operated at capacity to deliver volumes at levels consistent with the comparative period. Investment focus remains on capacity extensions across the frozen chicken category.

The AMP Group recorded overall volume growth of 25% over the comparative period, driven by a solid recovery in the beef category, which w