- Dairibord Holdings recorded 93% of sales in US Dollars for Q3 2023
- Cumulative US dollar sales for the nine-month period reached 74% increase from 51%
- Sales volumes grow by 11% in the quarter
Harare- Dairibord Holdings Limited, a milk processor listed on the Zimbabwe Stock Exchange (ZSE), has reported that 93% of its sales for the quarter ended 30 September 2023 were denominated in US Dollars. Cumulative US dollar sales for the nine-month period reached 74%, showing a significant increase from the previous 51%.
These figures reflect the company's advantage in the face of Zimbabwe's liquidity crunch and ongoing currency crisis, as the Central Bank grapples with economic challenges. Dairibord Holdings experienced a 7% growth in exports, which accounted for 11% of its total sales.
During the period, the Central Bank implemented a hawkish monetary policy stance, keeping bank policy rates at 150% (currently 130%) and the Minimum Bank Acceptance (MBA) rate at 75%.
These measures were taken to tighten liquidity in the economy. As a result, liquidity was constrained, leading to the deferral of projects and delayed payments to exporters. This benefited through an increase in the concentration of US dollars in their transactions.
During the quarter, sales volumes grew by 11% to reach 25.8 million litres compared to 23.2 million litres in the previous period. The company saw positive performance in its liquid milks and beverages segment, which experienced a growth of 16% while the beverages category showed a 14% increase despite the foods segment facing a decline of 24% during the same period.
In the nine-month cumulative period, it achieved a 10% increase in sales volumes compared to the previous period. Within these sales, beverages accounted for 65%, liquid milks contributed 28%, and foods made up 7% of the total sales. This indicates that beverages were the largest contributor to the company's sales, followed by liquid milks and then foods.
On quarterly basis, domestic sales revenues surged by 870%, while exports saw an impressive growth of 1213%. These figures highlight the company's strong performance and success in generating increased revenue from both domestic and international markets during the specified quarter.
These were result of a 13% increase in processed milk over the nine-month period, reaching a total of 22.4 million litres.
Looking ahead, the Group expects to further enhance its margins through several strategies. These include route to market optimization where the Group aims to analyze and optimize its distribution channels and methods to improve the efficiency of bringing its products to market. This may involve identifying more effective ways to reach customers, reducing transportation and logistics costs, and enhancing overall supply chain management.
The Group also plans to rationalise operations which entails streamlining and optimizing its operations by identifying areas where costs can be reduced, eliminating redundancies, improving operational efficiency, and enhancing productivity. This may involve evaluating processes, systems, and organizational structures to find opportunities for improvement.
Lastly, the Group aims to increase profitability going forward through automation and equipment de-bottlenecking projects: The Group intends to leverage technology and automation to enhance its processes and increase production capacity. This may involve implementing automation technologies to improve efficiency and reduce costs. Equipment de-bottlenecking refers to identifying and resolving constraints or bottlenecks in the production process by upgrading or optimizing equipment to increase output.
By implementing these strategies, Dairibord Holdings aims to achieve improved margins, which can lead to increased profitability and operational efficiency in the future.
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