Tawanda Musarurwa Business Reporter
DAIRIBORD Zimbabwe Ltd has announced a decline in net profit for the half year to June 30, 2012, to US$1,9 million from US$2,3 million. The company attributed the knock on net profits to exchange losses suffered from its Malawi subsidiary. During the period under review, the Malawi
government devalued its currency by 49 percent to 250 Malawian kwacha to the United States dollar.
“Business in Malawi continues to be affected by foreign currency shortages and restrictive retention policies,” Dairibord chairman Dr Leonard Tsumba said in a statement.
“In May 2012, the Malawi kwacha (MWK) was devalued by 49 percent to MWK250: US$1, exerting pressure on costs
“The exchange losses arising from the devaluation in Malawi amounting to US$1,1 million are accounted for in the statement of comprehensive income.”
The company has also indicated that it is still in the process of disposing of its Malawian subsidiary, Mulanje Peak Foods.
Notwithstanding the Malawi exchange losses, Dairibord posted a 36 percent increase in profit for the six months period, which rose to US$3,1 million from US$2,3 million in the prior comparable period last year. Revenue during the period rose 14 percent to US$48,6 million, largely driven by its food products.
“Revenue growth by product portfolio was 24 percent for foods, 16 percent for beverages and 4 percent for milks,” said the company in a statement.
Sales volumes, which stood at 32,2 million litres, posted a 9 percent improvement from the same period last year.
In terms of volumes, growth across the various divisions, foods volumes went up by 14 percent, beverages also by 14 percent, while milk volumes increased by three percent.
“Growth in foods and beverages was driven by increased capacity from significant investments in the yoghurt, Nutriplus and Cascade equipment, all commissioned in 2011,” said Dairibord.
The company has also reported that raw milk intake rose by 5 percent to 12,8 million litres, with Zimbabwe increasing by 9 percent and Malawi recording a 7 percent decrease.
During the period, the company divested from biscuit producer ME Charhons for US$1 million.
Meanwhile, although basic earnings per share shot up 35 percent to US$0,88, the group did not declare a dividend.
Going forward, Dr Tsumba said the group would focus on tight cost management and intensifying marketing efforts, among other measures to improve profitability in the current year.