- Of this, US$1.5m was invested in UHT
- Sales volumes up 78%
- Revenue grew by 67% compared to 2020 same period
- With year to date foreign currency revenue up by 196%
Harare – Listed milk processor, Dairibord Holdings has invested US$3.5 million to boost the production of ice-cream, improving product portfolio mix and margin performance going forward, the Group said in a trading update for the third quarter ended 30 September 2021.
Of the US$3.5 million, US$1.5 million was used into a recently commissioned ammonia plant while US$2 million was invested in additional Ultra High Temperature (UHT) filling and packaging equipment that will double capacity for catornised beverages towards the end of the fourth quarter of 2021.
The commissioning of the new plant came after the crumble of the merger with its competitor, Dendairy through which the Group was looking to grow its brand portfolio for both domestic and foreign markets.
Meanwhile, raw milk utilised was 5% ahead of the prior year comparative period while cumulative raw milk utilised also increased by 3% over the same period.
However, milk supply remained constrained by high costs of stock feeds experienced by the Group that resultantly affected liquid milk growth, which registered a 13% increase ahead of the same period in 2020.
“The Government launched command silage, a welcome initiative intended to support dairy farmers grow their own silage in order to improve stock feed availability and reduce cost of milk production,” said the Group.
During the period under review, sales volumes grew by 78% over same period last year thus, rolling year to date sales volumes of 67 million litres to 63% above the same period last year.
Beverages category anchored the growth with a 165% increase over prior year, whilst the Foods category grew by 49%.
According to the Group, year to date inflation adjusted revenue surged 67% above the same comparable period last year with year to date foreign currency revenue increasing by 196% from 2020.
“Significant cost push pressures ahead of inflation were experienced from both the local and foreign supply sources of raw and packing materials, negatively impacting margins,” the Group said.
However, cost containment, cost reduction, and strategic procurement of inputs mitigated the negative impact, therefore, resulting in a slight recovery in the year to date operating margin to 6% compared to 4% in 2020 during the same quarter.
Borrowings which were utilised to fund stocks of materials to support growing volumes and capital investments as at 30 September 2021 were ZWL839 million, up 30% from 30 June 2021, as the business leveraged the balance sheet for growth.
Capacity utilisation increased 60% during the period from 33% in the same quarter last year.
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