8th Jun 2016 09:46
LONDON (Alliance News) - Zambeef Products PLC Wednesday said it was confident of meeting its full year expectations, as it reported a swing to a pretax profit for its first half.
The company, which produces and sells meat and dairy products in Zambia, Nigeria and Ghana, said its results were boosted by a final settlement reached with the Zambian Revenue Authority over a disputed tax liability in its former Zamanita business, which led to a write-back on its profit and loss account of around USD3.5 million.
For the half year to end-March Zambeef reported a pretax profit of USD9.7 million, swung from a pretax loss of USD3.8 million the year before, as a fall in revenue to USD98.8 million from USD102.1 million was offset by a big drop in administrative expenses, and a USD1.4 million gain on currency translations, compared to a USD7.6 million loss the prior period.
Zambeef attributed its performance to a continued focus on its core business, cost control, and an aggressive expansion of its retail network. In Zambian kwacha, operating profit improved to ZMW155.3 million from ZMW51.4 million.
Zambeef said that, after a highly volatile performance in the 2015 financial year, the kwacha showed stability against the dollar.
The company said that the global economic slowdown and decrease in demand for commodities like copper led to a lower growth rate in Zambian gross domestic product to 5% from 5.6% in 2014. This decline is expected to continue to around 3.3% for 2016 before increasing again in 2017.
"With the strong focus on the retailing operations, Zambeef is confident that this robust performance will continue, demonstrating the resilience of the group's business model. As a consequence of this strong operational performance, the board is confident of meeting full year expectations," said Chairman Jacob Mwanza in a statement.
Shares in Zambeef were up 4.9% at 8.00 pence Wednesday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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