Dairibord’s HY20 sales tumble following a troubled Q2 performance

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  • Total sales volumes dropped by 32%
  • Raw milk intake was down 6%
  • Group revenue declined by 15% in inflation adjusted terms

Harare – Dairibord Holdings’ sales volumes for the six months ended 30 June 2020 (HY2020) declined following a massive drop in the second quarter’s sales due to the impact pf the COVID-19 pandemic.

Volumes sold in the period declined by 32% to 27.3 million litres with first quarter volumes declining by 19% and the second quarter’s by 46%.

The decline in Q2 sales has been attributed to the impact of the COVID-19 induced restrictions which took a toll on operations.

Liquid milks, foods and beverages sales volumes in the period decreased by 19%, 39% and 41% respectively.

In a statement accompanying the Group’s results for the period under review, Group Chairperson, Josphat Sachikonye stated that raw milk intake dropped by 6% to 13 million litres compared to the prior comparative period and was consistent with the decline in national milk production.

“The Group remains the biggest milk processor accounting for 38% of national intake and continues to be committed to supporting local farmers to grow milk supply so as to reduce dependence on imported milk powders”, Sachikonye said.

He added that the most limiting factor in raw milk production over the period was the high cost of stock feeds, escalating at a rate higher than inflation and to mitigate the erosion of producer viability, Dairibord continued to make frequent producer price adjustments.

The Group’s revenue for the period declined by 15% from prior comparable period to ZWL1.2 billion in inflation-adjusted terms.

In spite of logistics constraints in accessing regional markets due to COVID-19 restrictions, export volumes accounted for 8% of total sales volumes, up from 5% in the same period last year.

Meanwhile the Group is still engaged in negotiations for a merger and acquisition transaction which if successfully concluded, will have a material effect on the price of the company’s shares and shareholders are therefore advised to exercise caution when dealing in the company’s shares until further notice.

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