Livestock Feeds Plc’s 2022 Annual Report: N30 Trillion Livestock Sector Projected Amidst Economic Challenges

Published On: June 20, 2023Company: Livestock Feeds Plc (LIVEST.ng)
How is Livestock Feeds Plc addressing the challenges posed by the economic environment, including inflation, insecurity, and rising input costs?
Livestock Feeds Plc is implementing strategies to mitigate challenges, such as optimising process optimisation, focusing on cost containment, enhancing operational efficiency, and improving brand awareness and supply management. The company's initiatives aim to increase value addition to customers and ensure long-term value for shareholders.

Key Insights from Livestock Feeds Plc’s 2022 Annual Report

Economic and Business Environment

  • Recovery from the COVID-19 pandemic and the Russia-Ukraine conflict had far-reaching effects on businesses and individuals globally.
  • Inflation soared to an all-time high, leading to economic contraction in most countries, especially in Africa.
  • The Central Bank of Nigeria tightened consumer spending by increasing the interest rate, affecting businesses’ borrowing costs.
  • Rising insecurity across the country and flooding posed significant challenges for businesses and disrupted supply chains.

The Feed Milling Industry

  • The livestock sector in Nigeria is projected to be a N30 trillion industry, but it faced challenges due to infectious diseases and economic losses.
  • Livestock Feeds Plc focused on sustainable farming and disseminated best management practices through various schemes.
  • Feeds account for about 75% of the total input cost in livestock and poultry farming.
  • Rising insecurity across the country negatively impacted the production and supply of raw materials for the feed mill industry.

2022 Operating Results

  • Livestock Feeds Plc recorded a revenue increase of 12% compared to the previous year.
  • The company experienced a pre-tax loss of N781.3 million due to sharp drops in product margins, high energy costs, and exorbitant borrowing costs.
  • Investment in a sophisticated accounting software enhanced operational efficiency and financial reporting.

2023 Outlook

  • The Nigerian economy’s performance in 2023 may be influenced by the general elections, the CBN’s policies, and the Russia-Ukraine conflict.
  • Inflation is expected to rise, leading to potential interest rate hikes and declining purchasing power.
  • Agricultural commodities and input prices are forecasted to increase, and heightened insecurity may disrupt the supply chain.
  • Livestock Feeds Plc has initiated strategies to increase value addition, improve operational efficiency, and enhance brand awareness and supply management.

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About Livestock Feeds Plc (LIVEST.ng)

Livestock Feeds Plc manufactures and markets a range of animal feed products in Nigeria which includes feed for poultry, pig and cattle. The company is the dominant brand in animal feeds with an installed capacity of 40 MT/hour single shift and a network of 12 franchise millers. Livestock Feeds Plc was established in 1963 as a subsidiary of Pfizer to provide health and nutritional products for exotic milking cows and hybrid chicken that were being imported into Nigeria. The company’s head office is in Lagos, Nigeria. Livestock Feeds Plc is listed on the Nigerian Stock Exchange

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Giri

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