29th Mar 2019 12:22
LONDON (Alliance News) - Africa-focused agribusiness Zambeef Products PLC said on Friday it expects to report a trading loss for the first half of its financial year, and a full-year pretax profit below market expectations.
In more detail, Zambeef said that pretax profit for the year ending September 30 will be 30% to 40% below market expectations, however revenue is set to be in line with expectations.
During the six months ending March 31, Zambeef said the Zambian economy has been under significant fiscal pressure, leading to higher food and fuel prices which has affected the disposable income of the company's customers.
The Retailing and Cold Chain Food Products division is expected to grow revenue, however volumes are set to be similar to the prior period, and the tough market conditions have put pressure on margins.
Zanbeef's Cropping division is also set to see headwinds, due to forecasts that the total harvest of soya beans in the country will be 20% to 30% higher than expected, leading to pressure on prices that are expected to be 10% lower than the year before.
Finally, the Stock Feed division reported good revenue growth during the interim period, however margins are lower due to higher costs related to the depreciation of the Zambia kwacha.
Shares in Zambeef Products were down 5.5% at 9.82 pence on Friday.
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