Harare – Diversified industrial conglomerate Innscor Africa Limited says its National Foods division delivered a reasonable set of results for the year ended June 30, 2018 delivering 543 000 metric tonnes, which is an increase of 7 percent over the comparative year, but lower average selling prices resulted in lower revenue growth of 3 percent and operating profit levels were similar to the comparative year.
In the period under review, Innscor said below the operating profit level, a strong result from Pure Oil, however, resulted in overall profit before tax showing growth of 23 percent over the same period.
It said an improved performance was noted in the maize and FMCG divisions, whilst the stockfeeds division started to recover in the second half of the financial year as day old chick supply improved.
“Whilst Flour volumes increased by 28 percent on the comparative year, a record in the company’s history, margins were significantly impacted by the fact that significant cost push was absorbed in the mill-bake value chain.
“The company’s position with its foreign wheat supplier deteriorated significantly over the year, with US$37.588m remaining outstanding at the end of the year under review.”
Innscor said regular and constructive engagements with the Reserve Bank of Zimbabwe and other relevant authorities continue and it will be critical that a meaningful solution to this matter is found to ensure that there are no disruptions to the supply of imported wheat, and consequent shortages of flour and bread.
It said the outlook for the business is anchored around clearing the foreign wheat obligation, securing favourable raw material positions, additional product innovations and continual efficiency improvement across all factories.
Profeeds, an associate company of the Group, recorded a 6 percent decline in feed volumes over the prior year, this was largely a result of the lower day old chick supply following the outbreak of Avian Influenza.
Volumes, however, improved considerably in the second half of the year, and this together with new lines and improved product mix resulted in a 4 percent increase in revenue over the comparative year.
During the period under review, operating profit increased 26 percent on the comparative year, a result driven by the favourable sales mix and good overhead control.
Additionally, the Group said, re-branding of the operation’s popular retail network continues with the recent successful launch of the new “Profeeds City” concept, which offers customers a much wider base of agricultural and ancillary products and enhancements and product additions in the feed manufacturing division also continue.
- Equity Axis News
