REG - Zambeef Products PLC - Trading Update

Zambeef ProductsAnnouncement

07/06/2023 08:00

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RNS Number : 8497B  Zambeef Products PLC  07 June 2023

Zambeef Products plc

("Zambeef" or the "Group")

 

Half Year Trading Update

Zambeef (AIM: ZAM), the fully integrated cold chain foods and retail business
with operations in Zambia, Nigeria and Ghana provides the following update on
trading.

 

During the half year period to 31 March 2023, the Group has seen demand for
its products increase, supported by a price moderation approach, resulting in
volume growth across most product categories. However, lower than expected
selling prices and higher input costs (which couldn't be passed on to the
consumer), including higher genset diesel costs in the first quarter of 2023,
put pressure on gross margins. The cropping division was adversely impacted by
a 71% drop in the price of soya beans, exacerbated by reduced yields, which
was partially offset by the higher maize price. The higher maize price further
exerted pressure on stockfeed margins. The operating environment was
characterised by increased competition, no real growth in consumer spending
and unstable macroeconomic fundamental effects, largely driven by delayed
finalisation of the country's debt restructuring.

 

For the year ended 30 September 2023 (all in USD), revenue, adjusted EBITDA
and reported profit before tax are expected to be inline with market
expectations. However, gross profit is expected to be between 8% - 12% behind
market expectations, largely due to the pressure on margins arising from lower
than expected pricing and higher input costs as described above.

 

The exchange rate depreciated steadily over the period, experiencing a sharper
depreciation towards the end of March 2023, beginning the financial year at
K15.9/USD and ending the period at K21.6/USD.

 

The Group expects its results for the half year period ended 31 March 2023 to
be released by the end of June 2023. Shareholders are advised that the
information contained in this Trading Update has not been reviewed nor
reported on by the Company's external auditors.

 

 

For further information, please visit www.zambeefplc.com
(http://www.zambeefplc.com) or contact:

 

 Zambeef Products plc                         Tel: +260 (0) 211 369003
 Faith Mukutu, Chief Executive Officer
 Mboo Mumba, Chief Financial Officer

 finnCap Ltd (Nominated Adviser and Broker)   Tel: +44 (0) 20 7220 0500
 Ed Frisby/Abigail Kelly (Corporate Finance)
 Tim Redfern/Barney Hayward (ECM)

 Autus Securities Limited                     Tel: +260 (0) 761 002 002
 Mataka Nkhoma

About Zambeef Products plc

Zambeef Products plc is the largest integrated cold chain food products and
agribusiness company in Zambia and one of the largest in the region, involved
in the primary production, processing, distribution and retailing of beef,
chicken, pork, milk, dairy products, fish, flour and stockfeed, throughout
Zambia and the surrounding region, as well as Nigeria and Ghana.

It has 236 retail outlets throughout Zambia and West Africa.

The Company is one of the largest suppliers of beef in Zambia. Five beef
abattoirs and three feedlots are located throughout Zambia, with a capacity to
slaughter 230,000 cattle a year. It is also one of the largest chicken
producers in Zambia, with a capacity of 8.8m broilers and 22.4 million day-old
chicks a year. It is one of the largest piggeries, pig abattoirs and pork
processing plants in Zambia, with a capacity to slaughter 75,000 pigs a year,
while its dairy has a capacity of 120,000 litres per day.

The Group is also one of the largest cereal row cropping operations in Zambia,
with approximately 7,787 hectares of row crops under irrigation, which are
planted twice a year, and a further 8,694 hectares of rainfed/dry-land crops
available for planting each year.

-Ends-

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