By Alois Vinga
LISTED milk processor, Dairibord Zimbabwe Limited (DZL) recorded a 6 % decline in raw milk intake as the national milk production decline took a toll on operations during the half year period ended June 30, 2020.
Company board chairperson, Josphat Sachikonye said this week that despite the decline in raw milk intake, DZL remains the largest milk processor.
“Raw milk intake for the period was 13 million litres. This was 6% below prior year and was consistent with the decline in national milk production. The group remains the biggest milk processor accounting for 38% of national intake,” he said.
DZL continues to be committed to supporting local farmers to grow milk supply so as to reduce dependence on imported milk powders.
Sachikonye said the most significant limiting factor to growth in raw milk production over the period was the high cost of stockfeed, escalating at a rate higher than inflation.
To mitigate the erosion of producer viability, DZL continued to make frequent producer price adjustments.
The company’s sales volumes for the period at 27.3 million litres, were 32% below prior year.
First quarter volumes were 19% down, while the second quarter volumes declined by 46% as the impact of the Covid-19 induced restrictions took a toll on operations.
“Liquid Milks, Foods and Beverages volumes dropped by 19%, 39% and 41% respectively compared to same period last year. Revenue for the period was $1.2 billion, 15% below 2019, however in historical terms revenue grew by 537%,” he said.
Exports over the period accounted for 8% of the sales volume, up from 5% in the same period last year despite logistics constraints in accessing regional markets due to Covid-19 restrictions.
Despite the operational inefficiencies caused by the diseconomies of scale, the group continued to focus on cost control, and as a result, total operating costs declined 16% from prior period.
The business achieved an operating profit of $107 million compared to $43 million for the same period in 2019. The loss for the year at $0.48 million was due to the monetary loss of $135 million.