By Alois Vinga
LISTED manufacturer and marketer of milk, Dairibord Zimbabwe Limited (DZL) has seen foreign currency revenues growing by 193% on the backdrop of a stabilising economic environment.
Presenting a trading update for the first quarter ended March 31, 2021, DZL company secretary, Samson Punzisani said the total foreign currency revenues registered significant growth.
“Foreign currency revenues grew by 193% and accounted for 15% of total revenue for the period and thereby contributing to improved capacity to procure raw and packaging materials.
“During the quarter under review, macroeconomic fundamentals were relatively stable continuing from the fourth quarter of 2020. Foreign currency availability and stability improved, stabilising prices, resulting in declining inflation,” he said.
The developments are closely related to the Reserve Bank of Zimbabwe Foreign Exchange auction launched last year which has so far managed to ease acute foreign currency shortages while stabilising exchange rates.
During the period under review, DZL’s operating profit margin at 3% in inflation adjusted terms remained under pressure due to high input costs.
Dairibord remained the largest milk processor in the country within the quarter, with a 40% raw milk intake market share. The company’s intake for the period was 1% lower than the prior year, outperforming the average national decline of 8% recorded by processors.
Efforts to grow raw milk supply will continue.
Sales volumes increased by 18% over the same period in 2020, with growth being recorded across all product categories. Liquid milk sales grew by 10% on account of significant growth in Lacto and Steri.
DZL remained the largest milk processor in the country within the quarter, with a 40% raw milk intake market share. The company’s intake for the period was 1% lower than the prior year, outperforming the average national decline of 8% recorded by processors.
Growth in this category was constrained by raw milk supply shortages. Foods grew 31% driven by excellent growth in yogurts and ice creams.
Beverage volumes were 22% above those of the comparative period on account of growth in Pfuko and the dairy juice blends of Cascade and Fun n Fresh.
“Dairibord projects a better second-quarter performance than the first quarter anchored by a continued volume growth trajectory and cost containment. The business is geared to take advantage of the improving macro-economic environment,” Punzisani added.