Zambia Forestry & Forest Industries Corporation Reports 0.3% Decrease in Gross Profit Margin for 2023

What explains the decrease in the Corporation's gross profit margin in 2023?
The decrease in gross profit margin is mainly due to the increase in the cost of production, which was a result of the depreciation of the Kwacha against the major currencies.

Summary of Key Points

  • The financial statements in the report were prepared according to the International Financial Reporting Standards alongside the requirements of the Companies Act, 2017 and the Securities Act, 2016 of Zambia.
  • In 2023, the Zambia Forestry and Forest Industries Corporation recorded positive results despite challenges including low customer demand and increasing input costs due to adverse economic conditions.
  • The Corporation posted a gross profit of ZMW 287 million, a slight decrease of 0.3% from the previous year. The gross profit margin was 68% in 2023, compared to 75% in the prior period.
  • The decrease in gross profit margin is mainly attributed to the increase in the cost of production due to the depreciation of the Kwacha against major currencies.
  • The net profit for 2023 was ZMW1.2 billion compared with ZMW2.6 billion in 2022, a reduction of 55%. This reduction is attributed largely to the stabilization of the value of biological assets.
  • Total revenue increased by 10% to ZMW423 million largely driven by the increased demand for eucalyptus saw logs.
  • Operating expenditure rose by 1.5% due to adverse microeconomic conditions like volatile fuel prices.
  • Total non-current assets increased by 25% due to a gain in values of biological assets and revaluation of land and buildings.
  • Shareholders’ funds increased consequently due to the revaluation of assets and an increase in profitability.
  • The Corporation remained cash flow positive and resilient, providing financial flexibility to invest in growth opportunities.
  • In line with the Corporation’s 2024–2028 strategic plan, measures will be implemented for long-term operational excellence, efficiency, and financial and business sustainability, based on 2023 forest inventory results.
  • The Corporation will continue investing in plantations expansion, value addition, mechanization, automation, as well as cost-optimizing ICT projects.
  • No dividend was declared for the financial year ended on 31st December 2023, as earnings are to be reinvested into planned growth initiatives.

Useful links

About The Zambia Forestry & Forest Industries Corporation (

The Zambia Forestry and Forest Industries Corporation (ZAFFICO) is a leading forest and wood products company on the Lusaka Securities Exchange. With operations across Zambia, ZAFFICO is one of the country’s largest employers and is committed to sustainable forestry management. ZAFFICO’s core business is logging and trading timber, producing a variety of lumber, logs, plywood and firewood for sale. The company also produces paper and cardboard products, as well as bio-energy and charcoal.

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