ESTHER MSETEKA, Lusaka
ZAMBEEF Products Plc has had an excellent performance for 2015 with profits increasing by over 100 percent in dollar and Kwacha terms, according to the companyâ€™s abridged statement.
Zambeefâ€™s gross profit increased from K496,747 last year to K666,713 as at September 30, this year.
Zambeef also recorded an increase in operating profit from about K56,000 posted last year to K162,000 in the period under review.
â€œDespite significant macro-economic challenges, the group has had an excellent operational performance for the year with operating profits increasing by 140 percent in US dollar and 189 percent in Kwacha. Profit before tax excluding exchange losses increased by 576 percent in dollar and 712 percent in Kwacha.â€
The company, however, says despite recording some profits, the operational results have been severely impacted by the rapid depreciation of the Kwacha during the year resulting in exchange losses of US$20.2 million (K142 million).
The statement, which is available on the Lusaka Stock Exchangeâ€™s wesite, states that Zambeefâ€™s cold chain food product divisions performed particularly well, with gross profits increasing by 29.1 percent in Kwacha and 7.6 percent in dollar terms.
Zambeefâ€™s large cash inflow from operations as well as the disposal of Zamanita has resulted in the group reducing term debt by US$21.2 million and working capital facilities by US$25 million.
The development has resulted in total net debt reducing by US$46.2 million from US$118.5 million last year to US$72.3 million this year.
Zambeef says it converted a significant amount of its dollar-denominated debt into Kwacha to mitigate future currency exchange risks or losses.
â€œExchange losses for the year of US$20.2 million have reduced a pre-tax profit of US$15.1 million into a pre-tax loss of US$5 million,â€ Zambeef says.
Commenting on the results, Zambeef chairman Jacob Mwanza is optimistic that with a good strategy in place, the company will be able to take advantage of the growth opportunities available.
Dr Mwanza said the company will continue to actively explore strategic prospects to enable Zambeef unlock value and capital gains from within the group, and thereby reduce debt further.
â€œDespite significant macro-economic challenges, the groupâ€™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 Southern African Development Community and Common Market for Eastern and Southern Africa regions, and developing the business into a regional food supplier,â€ he said.
ESTHER MSETEKA, Lusaka