29th Sep 2014 08:34
LONDON (Alliance News) - Agribusiness Zambeef Products PLC Monday said it expects reported revenue for its financial year just ending to be "slightly lower" than market expectations on translation into dollars, but said it expects an adjusted pretax loss better than market consensus.
In a year-end trading update, Zambeef, which operates in Zambia, Nigeria and Ghana, and makes a majority of its sales in Zambian kwacha, said it expects its reported revenue for the year to September 30 to be slightly lower than market expectations when translated into dollars.
"However, the relatively stable exchange rate in the second half has curtailed the previously notified escalation in Zambeef's dollar-denominated cost base and this has resulted in improved gross profit margins versus market expectations," the company said in a statement.
Zambeef said this will mean its adjusted loss before tax, which excludes unrealised exchange gains and losses, will be better than market consensus.
In June, the company said its first-half results were hit by a number of issues, including extreme exchange rate volatility, the effects of African swine fever, lower soya bean prices, and the imported beef products issue which hit retail sales.
Zambeef said Monday that all of these issues eased in the second half.
"It is pleasing to report that, during the second half the exchange rate has returned to relative stability, resulting in reduced foreign exchange losses compared with the first half, and the African swine fever outbreak in 2013, which inhibited the movement of livestock, has now been resolved by the Zambian government,"
It said that as soya is a summer crop, lower prices were confined to the first half of the financial year, although it said that an expected good wheat harvest and higher prices in the second half has meant the cropping division is likely to perform above expectations for the year as a whole.
The company also said that retail sales are now higher than they were before the imported beef products issue.
"We are pleased to say that following a difficult year in 2013, which continued into the first half of the current financial year, the macro-economic backdrop experienced in Zambia recently has been stable and more helpful to Zambeef both operationally and financially, and we are hopeful that this situation will continue into the 2015 financial year," said joint chief executive officer's Carl Irwin and Francis Grogan in the statement.
The company said it will announce its full-year results on November 20.
Zambeef shares were trading 2.7% higher Monday morning at 18.49 pence.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Zambeef Prod.