4th Nov 2015 10:22
LONDON (Alliance News) - Zambeef Products PLC on Wednesday said it shrivelled its net debt in its recently-ended financial year and reaffirmed its profit guidance for the year.
The company, which produces and sells meat and dairy products in Zambia, Nigeria and Ghana, said its net debt at the year-end of September 30 was reduced by USD43.3 million on the year before to USD74.7 million.
Zambeef added that is working to convert its dollar-denominated debt to Zambian kwacha, as while dollar debt carries a significantly lower interest cost than with the kwacha, it also carries "significant risks from exchange rate movements", noting that during the last financial year, the kwacha halved in value against the dollar.
"The group continues to look at ways of reducing exposure to the US dollar even further in order to mitigate future earnings volatility arising from exchange rate fluctuations, whilst also seeking to preserve the most efficient capital structure," Zambeef said.
Zambeef confirmed that full-year operating profit and cash generated from operations will be ahead of previous market expectations, while adjusted pretax profit will be in line.
It made a revenue of USD39.7 million in the year, which it expects to continue growing in the new financial year as it increased the range of products it exports into the Southern African Development Community and the Common Market for Eastern and Southern Africa regions.
"In the first month of the current financial year it is encouraging to see continued robust demand in our core markets. As a result, we continue to expect growth in revenue and profit in Zambian kwacha terms in the current financial year," the company said.
Shares in Zambeef were trading up 9.8% at 6.45 pence Wednesday morning.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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