22 January 2018
   
Winky D gives voter registration oomph
Cholera: Zim on high alert as 4 killed
ANC confirms Zuma exit discussion
Government orders blood price reduction
- One day’s supply left of key blood group
Kasukuwere begs ED for forgiveness: official
Chinamasa to divert wages to devolution
Dump Mugabe regalia, Zanu PF official
MORE NEWS
Gemmology center in Mutare soon
NRZ loss as gold miners damage rail line
MORE BUSINESS
Unpaid Mr ugly reports sponsors to ZRP
Zim author releases new book in USA
MORE SHOWBIZ
Billiat might still leave: Sundowns coach
Anger as Dembare approach City player
MORE SPORTS
Mnangagwa’s ‘New’ Zim merits support
Zhuwao: kleptocracy and EDiots in Davos
MORE OPINION
 
Mnangagwa off to Davos empty handed
Economy: the need for a paradigm shift
MORE COLUMNISTS
 
 

Dairiboard sinks to $4 m operation loss

31/03/2017 00:00:00
by The Source
 
 
RELATED STORIES

ZIMBABWE’s largest milk processor , Dairibord made an operating loss of $3,99 million from a $3,97 million operating profit recorded in the previous year on the back of high overhead costs, chief executive Anthony Mandiwanza told analysts on Wednesday.

Overheads increased by 10 percent from $20,7 million in the previous year to $22,8 million on the back of a $2,8 million once off impairment of inventories, receivables and equipment.

Revenue declined by 10 percent from $103,4 million in the preceding year to $93,4 million on the back of declining volumes and price adjustments to remain competitive.

Sales volumes declined by 1 percent to 83 million units while price per litre realised fell 9 percent to $1,13.

Liquid milk, food and beverages lost 15 percent, 12 percent and 3 percent revenue respectively in the period as a result of the impact of price adjustments and static volumes.

Volumes declined despite an 18 percent surge in Pfuko volumes which was buoyed by increased capacity and additional flavours.

The company said it lost 2 million litres of liquid milk as a result of supply constraints on imported UHT and delays on commissioning the UHT carton machine.

Dairibord’s market share in national raw milk stood at 47 percent.

Production costs remained flat at $20,9 million but gross profit fell 23 percent to $18,9 million.

Total assets declined by percent from $78,7 million in the previous year to $74,5 million because of  inventories.

The group increased its borrowings from $9,7 million in the preceding year to $10,5 million, increasing the gearing ratio from 17 percent to 19 percent.

Cashflow from operations declined from $6 million in the previous year to $4,5 million and the company said it will use the cash generated to invest in inventories, mainly imported milk powders, packaging materials and capex to support distribution and merchandising equipment.



Advertisement

Mandiwanza said Dairibord Malawi which contributed 3 percent of group revenue posted an operating loss of $200,000 in the year.

“The performance of the subsidiary was impacted by subdued macroeconomic performance characterised by low disposable incomes, a depreciating currency and reduced donor support,” Mandiwanza said.

However, the company said it will not dispose the poor performing operation as other options to extract value from the business are being considered.

Mandiwanza said the group has consolidated Dairibord Zimbabwe, Lyons and NFB logistics operations and projected a minimum savings of $2 million with a rationalisation cost of $1 million from retrenchments, head office relocations and relocation of plant and equipment.

Dairibord plans to import 300 heifers in the year for its contracted farmers to expand milk production.


 
Email this to a friend Printable Version Discuss This Story
Share this article:

Digg it

Del.icio.us

Reddit

Newsvine

Nowpublic

Stumbleupon

Face Book

Myspace

Fark

 
 
 
comments powered by Disqus
 
RSS NewsTicker