HARARE – The financial results for the first half of the year are in line with the management’s strategic targets for the listed food and beverage manufacturer, Dairibord. Despite the operating climate being generally disruptive, the improving margins are consistent with increased cost control. Competitors in the marketplaces for fast-moving consumer goods must successfully control their operating costs in light of Innscor’s integrated value chain approach.
It would have been comforting in the circumstances to learn that Dairibord had a plan in place to reduce its reliance on the public electrical system. The group will need to create more direct ties to the informal retail sector in addition to developing adequate capacity and effective operations to accomplish its expansion ambitions.
Due to the group’s liabilities being in foreign currencies, it is especially significant. Observation shows that Dairibord goods are already reasonably noticeable at unofficial retail “outlets”. Evidently, there is a need for the group’s products, and more direct marketing routes to the informal operators could improve price competitiveness.
Particularly in the informal retail sector, there appears to be a developing market for processed meals and beverages that use indigenous foods. It has already released a few products of this nature, and if a new market can be effectively corralled, it may be quite advantageous. Additionally, foods and drinks that are specifically influenced by local fruits and plants could be a more appealing offering for export markets.
In the fiscal half-year that concluded on June 30, 2022, Dairibord Holdings made a net profit after taxes of ZWL$689 million. The group returned to profitability after a comparable 2022 period thanks to the results.
Adjusted for inflation, total revenues increased by 40% to ZWL$17.1 billion. At ZWL$8.7 billion, beverage sales made up the majority of the group's income. The milk sales increase was muted at 3% to ZWL$4.5 billion, while food product sales growth had the biggest inflation adjusted rise after tripling to ZWL$3.8 billion.
In the first half of 2022, raw milk consumption by processors climbed by 17% to 38.96 million liters, according to Dairibord Holdings. Despite a little dip, the group's consumption of 12.2 million liters, or 32% of the nation's milk production, remained the highest among processors.
The group's overall sales volumes increased by 11% to 47 million liters throughout the period despite the decreased intake. The group's product diversification plan, which was intended to reduce reliance on milk sales, was credited with the achievement.
Total liabilities were ZWL$7.3 billion, while total assets were ZWL$16.6 billion. The company acknowledged that it owed US$4.6 million in foreign currency but claimed that the majority of those commitments were satisfied by its foreign currency-denominated assets and anticipated payments from foreign exchange auction allotments.
The organization then emphasized its worries about the nation's inconsistent electricity supply and excessive borrowing costs. The group claimed that cost control and boosting sales of food and beverages would be its key priorities.
The third quarter's commissioning of new processing equipment and capacity is anticipated to be the primary factor in the volume growth. The business added that it would adjust its marketing strategies to boost local USD, export sales, and cash receipts. It did not declare a dividend.
