Zambeef (AIM: ZAM), the fully integrated agri-business with operations in Zambia, Nigeria and Ghana, announce its final results for the year ended 30 September 2015.
Key Operational Highlights
- Strong performance from our core cold chain food products division, achieved through a market-driven strategy involving retail outlet upgrades and the introduction of new macro outlets.
- Further progress in West Africa with Shoprite opening an additional three stores during the period and a further eight expected to open in the current financial year.
- Progress made with our two joint venture agreements with RCL Foods Ltd with the new hatchery coming into production before the year end and Zamchick continuing to expand.
- Disposal of our edible oils business, Zamanita Ltd, to Cargill for a cash consideration of USD27 million, which has also led to the establishment of a strategic partnership with Cargill.
Key Financial Highlights
- Despite significant macro-economic challenges, the Group has had an excellent operational performance for the year with operating profits increasing by 140% in USD and 189% in ZMW.
- Profit before tax excluding exchange losses increased by 576% in USD and 712% in ZMW.
- Unfortunately these excellent operational results have been severely impacted by the rapid depreciation of the Zambian Kwacha during the year resulting in exchange losses of USD20.2m (ZMW142m).
- The Group has generated significant cash during the period with net cash inflow from operating activities increasing by 171% in USD and 223% in ZMW.
- The Group’s core cold chain food product divisions performed particularly well, with gross profits increasing by 29.1 per cent. in ZMW terms and 7.6 per cent. in USD terms.
- Exchange losses for the year of USD20.2 million have reduced a pre-tax profit of USD15.1 million into a pre-tax loss of USD5.0 million.
- The large cash inflow from operations as well as the disposal of Zamanita have resulted in the Group reducing term debt by US$21.2m and its working capital facilities by USD25.0m while the total net debt in USD terms has reduced by USD46.2 million, from USD118.5 million (2014) to USD72.3 million.
- The Group converted a significant amount of its USD denominated debt into ZMW in order to mitigate future currency exchange risks/losses.
- Post the period end, a Zambia Revenue Appeals Tribunal upheld Zambeef’s appeal against the ZMW49.15 million (USD3.91 million) Zamanita tax assessment.
Commenting on the results, Zambeef Chairman Dr. Jacob Mwanza, said:
“Despite significant macro-economic challenges, the Group’s performance was commendable, particularly in our core cold chain food products business, and we look forward to growing this business further, both in Zambia and the wider SADC/COMESA region, and developing the business into a regional food supplier.
“The successful sale of Zamanita resulted in net debt, in US Dollar terms, reducing by 39 per cent. (USD46 million), and we continue to actively explore strategic opportunities in relation to our non-core businesses and assets, which will allow us to unlock value and capital gains from within the Group, and thereby reduce debt further.
“We believe that the continued execution of our strategy will put Zambeef in a strong position to take advantage of the growth opportunities available.
“Therefore we look forward to making continued progress towards our aim of becoming a leading regional food supplier.”
For further information, please contact:
|Zambeef Products plc
Carl Irwin, Joint Chief Executive Officer
Francis Grogan, Joint Chief Executive Officer
|Tel: +260 (0) 211 369003
|Strand Hanson Limited
|Tel: +44 (0) 20 7409 3494
|Tel: +44 (0) 20 7886 2500
|Tel: +44 (0) 20 7220 0500
|Tel: +44 (0)20 7250 1446
Notes to Editors
The Zambeef Group is one of the largest integrated agri-businesses in Zambia, involved in the primary production, processing, distribution and retailing of beef, chickens, pork, milk, eggs, dairy products, fish, flour and stock feed, throughout Zambia and the surrounding region, as well as Nigeria and Ghana. The Group is also one of the largest cereal row cropping operations in Zambia, with a total of 24,174 hectares planted during FY2015 comprising a mix of approximately [two growing seasons] of 8,120 Ha of irrigated land and one growing season of approximately 8,480 Ha of rain-fed/dry land, available for planting each year.
The Group employed an average of 6,251 employees in the period.
Further information can be found on www.zambeefplc.com.
This publication is in line with standard practice for London Stock Exchange.
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