REG - Zambeef Products PLC - Full-Year Results and Notice of AGM
2nd December 2020
Zambeef Products plc
("Zambeef" or the "Group")
Full-year results for the year ended 30 September 2020 and Notice of AGM
Zambeef (AIM: ZAM), the fully integrated cold chain foods and retail business with operations in Zambia, Nigeria and Ghana, today announces its audited results for the year ended 30 September 2020.
Financial Highlights
Figures in 000's
2020
2019
%
2020
2019
%
ZMW
ZMW
USD
USD
Revenue
3,875,104
3,134,967
23.6%
239,648
254,462
-5.9%
Cost of sales
(2,659,482)
(2,053,420)
29.5%
(164,470)
(166,674)
-1.3%
Gross profit
1,215,622
1,081,547
12.4%
75,178
87,788
-14.4%
Administrative expenses
(1,005,091)
(920,338)
9.2%
(62,158)
(74,703)
-16.8%
Operating profit
210,531
161,209
30.6%
13,020
13,085
-0.5%
Finance costs
(92,322)
(82,790)
11.5%
(5,709)
(6,720)
-15.0%
Exchange losses
(137,705)
(36,730)
274.9%
(8,516)
(2,981)
185.7%
Share of loss equity accounted investment
(3,177)
(3,036)
4.6%
(197)
(246)
-19.9%
Profit before taxation
(22,673)
38,653
-158.7%
(1,402)
3,138
-144.7%
Taxation charge
(112,957)
(2,780)
3963.2%
(6,986)
(226)
2991.2%
Group income for the year from continuing operations
(135,630)
35,873
-478.1%
(8,388)
2,912
-388.0%
Profit/(Loss) from discontinued operations
33,435
(17,379)
292.4%
2,068
(1,411)
246.6%
Group income for the year
(102,195)
18,494
-652.6%
(6,320)
1,501
-521.1%
EBITDA*
435,803
224,904
93.8%
26,951
18,255
47.6%
Gross Profit Margin
31.4%
34.50%
31.4%
34.50%
EBITDA Margin
11.2%
7.2%
11.2%
7.2%
Debt/Equity (Gearing)
20.95%
27.30%
20.95%
27.30%
Debt-To-EBITDA
1.83
3.94
-53.6%
1.47
3.68
-60.0%
*EBITDA is defined as Earnings before interest, tax, depreciation, amortisation, fair value adjustments, loss of equity accounted investments, loss on disposal and net unrealised foreign exchange losses.
PERFORMANCE OVERVIEW
The financial year ended 30th September 2020 ("YE 2020") was characterised by a difficult operating and economic environment due to adverse macro-economic fundamentals and the Covid-19 pandemic. The Zambian Kwacha weakened by 54% against the USD, resulting in high inflation and reduced customer spending.
The Group also experienced challenges stemming from reduced electricity supply because of continued load-shedding, resulting in high diesel generator fuel expenditure and repairs and maintenance costs. This, coupled with a 49% increase in the electricity tariff at the beginning of the calendar year, significantly increased operational costs and eroded margins.
Despite the challenges noted above, Zambeef posted an operating profit of ZMW210.5 million (USD13.0 million), a 30.6% growth in Kwacha terms and 0.5% reduction in US Dollar terms, compared with ZMW161.2 million (USD13 million) in 2019. The Group's strong underlying performance was driven by growth in the Stockfeed, Dairy and Beef divisions. The Groups achievement, in the face of challenging operational and economic headwinds, demonstrates its strength as a diversified and vertically integrated operation.
KEY FINANCIAL HIGHLIGHTS
Revenue and gross profit increased by 24% and 12% respectively in Kwacha terms for the Group due to pricing across most of the divisions despite an increase in input costs. However, due to the depreciation of the Zambian Kwacha, results in USD reduced by 6% and 15% respectively in comparison to 2019.
The continued focus on cost control helped deliver a below inflationary increase of 10% from ZMW 921 million in the previous corresponding period to ZMW 1 billion in the period under review.
Finance costs reduced by 15% in USD which can be attributed to the net debt reduction following improved operating cashflow generation and Sinazongwe sale proceeds. No new long term debt positions were undertaken by the Group and payments were made towards reducing principal amounts on term debt.
The Group ultimately recorded a loss of ZMW 102 million (USD 6.3 million) for 2020 compared to a profit of ZMW 18.5 million (USD 1.5 million) in the previous period. The loss can be mainly attributed to the operating profit growth erosion by foreign exchange losses, financing costs and the impairment of deferred tax.
Zambeef's management remains committed to focusing on core divisions to generate cash flow that will be channelled towards deleveraging the business and investing in higher returning projects. Our plans are underpinned by:
o Consistent revenue growth through optimising existing retail infrastructure, driving our CCFP and Stockfeed operations;
o Continued capital investment in the best performing areas of the business;
o Cash generation through improved margins, cost control, working capital management and prudent capital expenditure;
o Continued divestment of non-core assets; and
o Environmental and food safety improvement projects.
Zambeef's management will continue to focus resources on the Group's profitable business divisions, while improving those divisions that need additional attention to ensure that all areas of the business contribute fully to Group profitability.
Commenting on these results, Chairman Mr. Michael Mundashi said:
"On the back of a challenging 2019 financial year, 2020 followed suit and proved to be an even tougher year for the Zambeef Group. The 2020 financial year was characterised by difficult economic and market conditions that were exacerbated by the Coronavirus (COVID-19) pandemic. Despite significant growth in the first half of the financial year, macro-economic headwinds - in particular those associated with the Kwacha depreciation - accumulated in the second half and negatively impacted the bottom line financial performance."
"The Board believes the key to sustainable growth, while mitigating the effects of economic cycles lies in remaining committed to achieving its strategic priorities. As such, the key focus remains on the core divisions that generate sustainable and strong cash flows, while reducing debt to release cash for reinvestment in higher returning projects.
"We expect the macro-economic climate to remain challenging in the 2021 financial year, characterised by an increase in volatility. The country's national debt level remains a threat to macro-economic stability in the short to medium term. We anticipate the COVID-19 pandemic will have minimal impact on our operations in 2021 as Zambia will adjust to living with the virus and resume life under the 'new normal'.
"Zambeef continues to de-risk the business by focusing on the reduction of debt to reduce the impact of foreign currency volatility on future earnings. The net debt for the Group declined by 41% in Dollar terms and 10% in Kwacha terms during the 2020 financial year.
"The Group is committed to the continued strengthening of its earnings potential and unlocking value through reducing debt levels in the medium term. This will mitigate foreign exchange and interest rate risk exposures, and free up cash for reinvestment in higher returning projects."
Copies of Zambeef's Annual Report and Accounts for the year ended 30 September 2020 and Notice of Annual General Meeting (AGM) will shortly be available on the Group's website.
The Group's AGM will be held on the 23rd of December 2020 via Zoom at 10.00 a.m. (Zambian time).
For further information, please visit www.zambeefplc.com or contact:
Zambeef Products plc
Tel: +260 (0) 211 369003
Walter Roodt, Chief Executive Officer
Faith Mukutu, Chief Financial Officer
Strand Hanson Limited (Nominated & Financial Adviser)
Tel: +44 (0) 20 7409 3494
James Spinney
Ritchie Balmer
Rob Patrick
FinnCap (Broker)
Tel: +44 (0) 20 7220 0500
Christopher Raggett
Powerscourt (Financial PR)
Tel: +44 (0)20 7250 1446
Nick Dibden
Bethany Johannsen
Pangaea Securities Tel: +260 (0) 211 220 707
Ceaser Siwale
Wendy Tembo
About Zambeef Products PLC
The Zambeef Products PLC is the largest integrated cold chain food products and agribusiness in Zambia and one of the largest in the region, involved in the production, processing, distribution and retailing of beef, chicken, pork, dairy, eggs, fish, flour and stockfeed; throughout Zambia and the surrounding region, as well as Nigeria and Ghana. The Group also has large cereal row cropping operations (principally maize, soya beans and wheat), with approximately 7,787 hectares of row crops under irrigation, which are planted twice a year and a further 8,694 hectares of rain-fed crops available for planting each year.
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement via Regulatory Information Service, this inside information is now considered to be in the public domain.
CHAIRMANS REVIEW
It is my pleasure to present to you my inaugural report as Chairman of Zambeef PLC with respect to the financial year ended 30 September 2020.
On the back of a challenging 2019 financial year, 2020 followed suit and proved to be an even tougher year for the Zambeef Group. The 2020 financial year was characterised by difficult economic and market conditions that were exacerbated by the Coronavirus (COVID-19) pandemic. Despite significant growth in the first half of the financial year, macro-economic headwinds, in particular those associated with the Kwacha depreciation, accumulated in the second half and negatively impacted on profitability.
The Group generated operating profit of ZMW 210.5million (USD 13.0 million) compared with ZMW 161.2 million (USD 13.1 million) in the prior financial year. Loss before tax was ZMW 22.7 million (USD 1.4 million) compared with a profit before tax of ZMW 38.7 million (USD 3.1 million) achieved in the prior financial year. The loss position is mainly attributed to a deferred tax asset impairment, higher financing and exchange losses following the depreciation of the local currency.
The Board believes the key to sustainable growth, while mitigating the effects of adverse economic cycles, lies in remaining committed to achieving its strategic priorities. As such, the key focus remains on the core divisions that generate sustainable and strong cash flows, while reducing debt to release cash for reinvestment in higher returning projects.
The Economic Environment
The global economy experienced a deep recession in 2020 as a result of the unprecedented reduction in production output and consumer demand following the slowdown in the first half of the calendar year. This COVID-19 related slowdown took a toll on the Zambian economy, which in turn impacted our customer base.
The COVID-19 pandemic, although a health crisis, had far-reaching effects on global trade and transformed social interaction. In the Zambian context, despite proactive and timely monetary and fiscal policy interventions by the government to support the economy, GDP is projected to contract by 4.2% in 2020 and rebound to growth of 1.8% in 2021.
The Zambian economy, which was already battling the effects of a high debt burden, cash illiquidity and waning global investor confidence, was left vulnerable when global commodity prices dropped amidst the reduction in global trade following the onset of the pandemic. The sharp depreciation of the local currency that came about as a result of reduced foreign currency inflows had a detrimental effect on the economy. Consumer price inflation closed at 15.7%, 730 basis points above the rate recorded the prior year.
As part of our sustainability programme, and to support Government efforts to contain the spread of COVID-19, Zambeef, in collaboration with partners, donated food and non-food items worth ZMW 1.2 million. As a Group, we are always proud to be part of the solution to the challenges facing the communities in which we operate.
Zambeef Debt Position
Zambeef continues to de-risk the business by focussing on the reduction of debt to mitigate the impact of foreign currency volatility on future earnings. The net debt for the Group declined by 41% in Dollar terms and 10% in Kwacha terms during the 2020 financial year. Term debt repayments during the 2020 financial year amounted to USD 8.9 million, reducing the total term debt to USD 18.2 million from USD 27.2 million in the previous financial year. With no new undertakings of debt, this puts the business in a less leveraged position and improves our debt service coverage ratio. However, our exposure to currency risk with our US Dollar denominated debt caused an increase in our term debt balance in Kwacha terms, due to the depreciation of the currency.
Divisional Performance review
Stockfeed
Stockfeed operations performed well during the year against the backdrop of the 2018/2019 drought and operational headwinds. This division was the largest contributor to operating profit for the Group due to a combination of increased sales volumes, and robust cost management on the back of improved operational efficiencies. The division sold 242,700 tonnes of feed in 2020, compared with 218,769 tonnes in 2019.
Retail and Cold Chain Food Products
The combined Retail and Cold Chain Food Products division posted a marginal 1.8% growth in operating profit in Kwacha terms on the back of an 18% growth in revenue. This was despite depressed consumer spending that negatively impacted sales volumes in our retail outlets. Cost pressures due to the depreciation of the Kwacha, continued load shedding and increased electricity tariffs further eroded margins.
Zambeef's chain of 236 retail outlets - both own-brand and within Shoprite supermarkets - remain at the heart of the business, with demand from our customers driving supply. The Group's focus during the 2020 financial year was to optimise our existing retail store performance. For the year ended September 30, 2020, we rolled out four new macro outlets in strategic locations, compared to seven in 2019. We also leveraged Shoprite's growth, opening three new in-store butcheries.
Cropping
Cropping division revenue grew 37% from the previous year, despite a reduction in volumes, due to a good summer crop price and translational currency effects. However, the division experienced a sharp escalation in costs resulting from the increase in electricity tariffs and US Dollar denominated costs. Load shedding caused electricity shortages that affected the winter wheat yield as optimal irrigation programmes could not be followed. Despite the challenges, the division contributed positively to Group operating profit.
Disposal of Non-Core Assets
The Group entered into a binding sale and purchase agreement with Chenguang Biotech (Zambia) Agri-Dev Limited for the sale of Sinazongwe Farm. The disposal was executed in March 2020 for a cash consideration of USD 10 million. Our Chiawa farm remains listed for sale.
Dividend
As a Group, we are steadfast in our dedication to enhancing shareholder value. However, in view of the financial performance and debt levels, the Directors have elected not to pay a dividend for this financial year.
Outlook
We expect the macro-economic climate to remain challenging in the 2021 financial year, characterised by an increase in volatility. The country's national debt level remains a threat to macro-economic stability in the short to medium term.
We anticipate the COVID-19 pandemic will have minimal impact on our operations in 2021 as Zambia will adjust to living with the virus and resume life under the 'new normal'.
The Group is committed to continued strengthening of its earnings potential and unlocking value through reducing debt levels in the medium term. This will mitigate foreign exchange and, interest rate risk exposures and free up cash for reinvestment in higher returning projects.
Acknowledgement
I express my sincere gratitude to my fellow Board members for leading the Group through this challenging year. To our management and staff, I express our utmost appreciation for your dedicated efforts, for producing solid performance, and for exhibiting resilience in challenging and unusual circumstances. The leadership our staff has demonstrated in adhering to safety protocols during this period of the COVID-19 pandemic is highly commendable.
As a Board we would like to express our deepest gratitude to the Chair of the Audit Committee, Dr. Lawrence Sikutwa, who will be retiring effective 31st December 2020. His leadership, strong commercial acumen and professionalism will be greatly missed. He has played a significant role in the Group and we all wish him the very best.
CHIEF EXECUTIVE OFFICER'S REVIEW
Overview
The financial year ended 30th September 2020 was characterised by a difficult operating environment because of adverse macro-economic fundamentals, worsened by the coronavirus (COVID-19) pandemic.
COVID-19 negatively impacted economic activity and increased unemployment, which directly affected the number of customers visiting our retail outlets.
The Zambian Kwacha weakened 54% against the US Dollar during the financial year, resulting in high inflation and reduced customer spending.
The Group also experienced challenges stemming from reduced electricity supply because of continued load shedding, resulting in high diesel generator fuel expenditure and repairs and maintenance costs. This, coupled with a 49% increase in the electricity tariff at the beginning of the calendar year, significantly increased operational costs and eroded margins.
Despite the challenges noted above, Zambeef achieved an operating profit of ZMW 210 million (USD 13.02 million), equating to 30.6% growth in Kwacha terms and a 0.5% reduction in US Dollar terms, compared with ZMW 161.2 million (USD 13.09 million) in 2019.
Our revenue was ZMW 3.9 billion (USD 239.6 million) and we achieved a gross profit of ZMW 1.22 billion (USD 75.2 million), respectively 23.6% and 12.4% above the prior year in Kwacha terms, but both down by 5.8% and 14.4% in US Dollar terms, respectively.
The Group's strong underlying performance was driven by growth in the stockfeed, dairy and beef divisions. Management continued driving efficiencies to enable sustained top-line growth while looking for opportunities to optimise costs. Tight management of overhead costs resulted in strong Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA), and improved operational leverage.
An increase in foreign exchange losses, particularly in the second half, resulted in an erosion of bottom-line performance. The depreciation of the Kwacha led to increased financing costs and exchange losses on our dollar denominated debt. Further, the impairment charge on a deferred tax asset of ZMW 47 million resulted in the Group posting a loss after tax of ZMW 135.6 million (USD 8.4 million) compared with a profit of ZMW 38.7 million (USD 2.9 million) in the prior financial year, a 478% and 388% reduction in Kwacha and Dollar terms respectively.
The Group delivered strong growth in operating profit during the first half of the year, supported by a stable macro-economic environment. The second half of the year saw the Group deliver encouraging results despite the challenging operating and economic environment, which was worsened by COVID-19 lockdowns.
The resilient performance demonstrates our strengths as a diversified and vertically integrated business with competitive brands, strong customer relationships, and an experienced management team.
Management continued driving efficiencies to enable sustained revenue growth while continuing to optimise costs. Our over-arching focus remains on achieving our long-term strategic objectives as they are the core principles that allowed us to achieve relative success during the financial year under review.
Strategic focus
Our strategic focus is to optimise our asset use and maximise returns. Proceeds from the sale of the Sinazongwe Farm and the prospective disposal of the Chiawa farm will enable us to pay down our debt further as we continue de-leveraging. We remain focused on our core businesses, in which we strive to be the best in class.
Retail and Cold Chain Food Products (CCFP)
The uncertainty surrounding COVID-19 and its associated protocols affected footfall in our stores. Despite an increase in revenue, depressed customer spending was evident through volume reductions across most of our product lines. The increase in revenue was mainly driven by price increases and greater sales volume of traded goods. Shoprite in-store butcheries were a source of revenue growth as Shoprite expanded its footprint with three new outlets.
High feed prices in the poultry and pork divisions negatively impacted input costs and resulted in margin erosion in some of our product lines. Despite this, the Group continued to grow revenues in the Retail and Cold Chain Food Products (CCFP) division from the prior full-year period. The beef and dairy divisions performed well, aside from some challenges in the supply of product.
However, retail and CCFP operating profits increased only marginally, having recorded volume declines in some product lines and cost pressures arising from the depreciation of the Kwacha and increased energy costs.
Stockfeed (Novatek)
The division delivered strong operating profit growth of 72.9% in Kwacha terms and 31.7% in US Dollar terms, and maintained margins due to volume growth, pricing and cost optimisation. Maize prices remained high, especially in the first half following the drought experienced in Southern Africa in the 2018/2019 farming season. This, coupled with a weak currency directly impacting input costs, necessitated upward pricing of Novatek products.
The poultry sector continues to be an important source of business for Novatek, accounting for 74% of revenue during the year. Export sales volumes continued to grow and were a major contributor to revenue growth, notwithstanding that for a large part of the year only fish feeds could be exported due to a continuing feed export ban.
Cropping
In the cropping division, operating profit grew by a marginal 4.7% in Kwacha terms and declined 20% in US Dollar terms due to escalating input costs and insufficient electricity supply. Zambia experienced a good rainfall season and the pricing of summer commodities was favourable. The year saw total production decrease by 7% to 133,547 tonnes, mainly because of a reduction in wheat yields and the impact of the Sinazongwe farm sale.
Management continued to manage the risk of disease, with the potential for an outbreak of Bacterial Leaf Streak (BLS) well contained during the winter.
Outlook
Zambeef management remains committed to achieving bottom line growth in line with our strategic objective of de-risking the business.
However, we expect the volatility in the economy to continue impacting the spending power of our customers.
The COVID-19 pandemic has impacted the way we do business. Although it appears to have been contained in Zambia and the region, any escalations could cause enforced lockdowns, which could negatively impact business. The Group remains committed to implementing and enforcing safety protocols in our outlets and places of work.
Key Market Indicators
Reporting Period Monthly Averaged Comparatives
2020
2019
Change
Economy
ROE ZMW/USD
ZMW
16.2
12.3
31%
TBS 364day
%
24.5
24.7
-1%
Annual Inflation rate
%
15.7
8.4
87%
Copper
$/Ton
6,610
6,102
8%
Commodities
Maize
$/ton
252
207
22%
Soya Beans
$/ton
382
400
-5%
SE Cake
$/ton
403
442
-9%
Wheat
$/Ton
415
447
-7%
Input Prices
Maize Bran
K/Ton
1,190
1,434
-17%
Broiler Grower
K/50kg
310
242
28%
Pig Grower
K/50Kg
251
200
26%
Layer feed
K/50kg
231
175
32%
Day-old chick
K/DOC
6.8
5.9
15%
Selling Prices
Beef Mixed cut
K/Kg
37.7
36.1
5%
Chicken Frozen
K/Kg
28.2
28.9
-2%
Chicken Live Market
K/Chicken
52.0
38.2
36%
Egg Tray
K/tray of 30 Eggs
35.6
28.0
27%
DIVISIONAL PERFORMANCE
Table 1 (ZMW) and Table 2 (USD) below provide a summary of the consolidated performance of the key business divisions to EBIT level.
Table 1: Divisional financial summary in ZMW'000
DIVISION
REVENUE
GROSS PROFIT
OVERHEADS
EBIT
2020 ZMW'000
2019 ZMW'000
2020 ZMW'000
2019 ZMW'000
2020
ZMW'000
2019
ZMW'000
2020
ZMW'000
2019
ZMW'000
Retailing
2,396,313
2,038,675
243,377
213,502
CCFP
1,516,371
1,388,492
401,276
367,657
Less InterCo.
(1,399,926)
(1,303,519)
Combined Retail & CCFP
2,512,758
2,123,648
644,653
581,159
(535,095)
(473,415)
109,558
107,744
Stockfeed
1,331,965
986,075
255,888
191,011
(129,539)
(103,751)
126,349
73,092
Cropping
651,560
474,202
266,405
270,116
(160,618)
(126,413)
105,787
101,082
Others
203,609
210,348
48,676
39,261
(25,226)
(21,930)
25,226
15,361
Total
4,699,892
3,794,273
1,215,622
1,081,547
(850,478)
(725,509)
366,920
297,279
Less: Intra/Inter Group Sales
(824,788)
(659,306)
Central Overhead
(156,389)
(136,070)
(156,389)
(136,070)
Group Total
3,875,104
3,134,967
1,215,622
1,081,547
(1,005,091)
(861,579)
210,531
161,209
Table 2: Divisional financial summary in USD'000
DIVISION
REVENUE
GROSS PROFIT
OVERHEADS
EBIT
2020 USD'000
2019 USD'000
2020 USD'000
2019 USD'000
2020
USD'000
2019
USD'000
2020
USD'000
2019
USD'000
Retailing
148,194
165,477
15,051
17,330
CCFP
93,777
112,703
24,817
29,842
Less InterCo.
(86,576)
(105,806)
-
Combined Retail & CCFP
155,395
172,374
39,868
47,173
(33,092)
(38,427)
6,775
8,745
Stockfeed
82,373
80,390
15,825
15,503
(8,011)
(9,571)
7,814
5,933
Cropping
40,294
38,490
16,476
21,925
(9,933)
(13,720)
6,542
8,205
Others
12,592
17,074
3,010
3,187
(1,450)
(1,940)
1,560
1,247
Total
290,654
307,977
75,178
87,788
(52,486)
(63,658)
22,691
24,130
Less: Intra/Inter Group Sales
(51,006)
(53,515)
-
-
Central Overhead
-
(9,672)
(11,045)
(9,692)
(11,045)
Group Total
239,648
254,462
75,178
87,788
(62,158)
(74,703)
13,020
13,085
DIVISIONAL REVIEW
Taking each of our key business areas in turn:
Retail and Cold Chain Food Products
Table 3 (ZMW) and Table 4 (USD) below show performance of each key business area of the combined Retail and Cold Chain Food Products divisions.
Table 3: Retail and Cold Chain Food Products ZMW'000
REVENUE
GROSS PROFIT
OVERHEADS
EBIT
DIVISION
2020
ZMW'000
2019
ZMW'000
2020
ZMW'000
2019
ZMW'000
2020
ZMW'000
2019
ZMW'000
2020
ZMW'000
2019
ZMW'000
Retailing Zambia
2,177,555
1,853,721
Retailing West Africa
218,758
184,954
Total Retailing
2,396,313
2,038,675
CCFP
1,516,271
1,388,492
Less Interco
(1,399,926)
(1,303,519)
Combined Retail & CCFP
2,512,758
2,123,648
644,653
581,159
(535,095)
(473,415)
109,558
107,744
Table 4: Retail and Cold Chain Food Products USD'000
REVENUE
GROSS PROFIT
OVERHEADS
EBIT
DIVISION
2020
USD'000
2019
USD'000
2020
USD'000
2019
USD'000
2020
USD'000
2019
USD'000
2020
USD'000
2019
USD'000
Retailing Zambia
134,666
150,464
Retailing West Africa
13,528
15,013
Total Retailing
148,194
165,477
CCFP
93,777
112,703
Less InterCo.
(86,576)
(105,806)
Combined Retail & CCFP
155,395
172,374
39,868
47,172
(33,092)
(38,427)
6,776
8,746
In line with our strategic focus to fully optimise our existing infrastructure and drive efficiencies through our retail network, we rolled out two new retail outlets in strategic locations across Zambia during the year, compared with seven in 2019. Shoprite, in which we operate instore butcheries, expanded by another three retail outlets in Zambia.
Net sales in the combined Retail and Cold Chain Food Products (CCFP) divisions increased by 18% to ZMW2,513 million (2019: ZMW2,124 million) in Kwacha terms and decreased by 10% to USD155 million (2019: USD172 million) in US dollar terms. The gross profit margin decreased marginally for a second year in a row, to 25.7% (2019: 27.4%) despite an 11% growth in gross profit in absolute Kwacha terms, due to escalating costs of inputs amid high inflation and the depreciation of the Kwacha. Overheads increased by 14% to ZMW535 million (2019: ZMW473 million) in Kwacha terms, but fell by 14% in US dollar terms to USD33 million (2019: USD38 million).
The combined Retail and CCFP divisions generated an EBIT margin of 4.4% (2019: 5.1%). The adverse macro-economic conditions and increased generator fuel costs led to the increase in input costs. Operating profit increased by 1.7% to ZMW110 million (2019: ZMW108 million) in Kwacha terms and decreased by 22.5% to USD6.8 million (2019: USD8.7 million) in US dollar terms.
Zambia Retail
Zambia retail revenue increased 17.5% to ZMW2,178 million (2019: ZMW1,854 million) while gross profit increased by 9.7%. However, due to the depreciation in the Kwacha relative to the US dollar, revenue decreased by 10.5% to USD135 million (2019: USD150 million) in US dollar terms.
Strong revenue growth was driven by stockfeed, chicken, cooking oil and other traded goods. Difficult trading conditions and disruptions in supply channels resulted in volume declines across most product lines. However, pricing adjustments helped the Retail division offset that volume related revenue decline.
West Africa Retail
Optimising operations was the main focus in our West Africa business this past year. Revenue increased 18.3% in Kwacha terms and declined 10% in Dollar terms from ZMW185 million (USD15.0 million) in 2019 to ZMW219 million (USD13.5 million) in 2020. During the period, the overhead costs in Kwacha rose by 23%. West African retail continues 9% to Group retail revenue, and remains profitable. The driver of profitability was mutton and pork sales, which increased, while chicken and beef sales decreased due to supply constraints.
Beef
Beef is the largest contributor to revenue in the CCFP division. Beef sales volumes decreased by 1.8% compared with the previous financial year, with the reduced number of cattle slaughtered owing to supply constraints following a drought in the previous year that also impacted average slaughter weights. Notwithstanding, the division posted 10% growth in revenue and 28% growth in gross profit due to a favourable sales mix and pricing.
Poultry (Zamchick, Zamhatch and ZamEgg)
Combined revenue from the three poultry divisions increased by 17% in 2020. Despite revenue growth, gross profit declined by 27% from ZMW126 million in 2019 to ZMW92 million in 2020, mainly due to higher feed prices. The divisions recorded a combined operating profit of ZMW2.6 million for 2020, a 95% decline from last year (ZMW49 million) and the sharpest decline in operating performance amongst our divisions during the financial year.
The informal and small-scale chicken farming sector increased supply where the formal sector could not supply effectively due to operational headwinds. Increased costs and electricity supply challenges had a lower impact on the informal sector, which positively contributed to sales volumes for Zamhatch and Novatek stockfeeds.
Zamchick volumes and revenue increased by 4% and 21% respectively compared with the prior year. High stockfeed price negatively impacted margins, resulting in a 26% reduction in gross profit for the division. Operational challenges were experienced during the 2019/2020 summer rain season as the industry faced widespread dysbacteriosis, which negatively impacted broiler growth performance.
The egg division, which is characterised by price elasticity, experienced a 12% reduction in volumes sold following average price increases of 22%. Despite a 6.6% increase in revenue, gross profit fell by 100% when compared to prior year.
Pork (Masterpork)
Supply chain disruptions in the Masterpork division stemming from high pig rearing costs led to a 12% reduction in volumes sold. The division performed better than the prior year, with revenue and gross profit growing by 13% and 38% respectively, mainly due to pricing adjustments. Management focussed on optimising the carcass quality of pigs slaughtered through advances in the grading and pricing system.
Milk (ZamMilk)
Milk revenue increased by 6%, and gross profit increased by 36% to ZMW92 million (2019: ZMW67 million). Sales volumes fell by 7% due to a COVID-19-related reduction in demand.
Milk production at Kalundu Dairy increased by 11% from an average of 26.6 litres/cow in 2019 to 29.6 litres/cow in 2020, with a total of 1,379 cows being milked daily at the year end. The feed cost of the milking herd increased by 10% due to the price of maize ingredients (maize meal and maize silage) included in dairy feeds.
Stockfeed (Novatek)
REVENUE
GROSS PROFIT
OVERHEADS
EBIT
2020
ZMW'000
2019
ZMW'000
2020
ZMW'000
2019
ZMW'000
2020
ZMW'000
2019
ZMW'000
2020
ZMW'000
2019
ZMW'000
1,331,965
986,075
255,888
191,011
(129,539)
(117,919)
126,349
73,092
USD'000
USD'000
USD'000
USD'000
USD'000
USD'000
USD'000
USD'000
82,373
80,039
15,824
15,504
(8,011)
(9,571)
7,814
5,933
Stockfeed performance was strong. Revenue in Kwacha terms grew by 35% (3% in US dollar terms), which translated into a growth of 73% in operating profit. The gross profit margin was maintained at 19% from the previous reporting period, as cost of sales grew at the same pace as revenue. Increased production costs due to running backup diesel generators for prolonged periods, and the increase in transport demands from the logistics fleet, led to a 10% increase in overheads.
The large and growing poultry sector in Zambia consumes 74% of the feed sales generated by Zambeef. The division also recorded an impressive 45% increase in export sales despite export restrictions. The division exported to 11 other African countries, generating much-needed foreign currency revenue.
Cropping
REVENUE
GROSS PROFIT
OVERHEADS
EBIT
2020
ZMW'000
2019
ZMW'000
2020
ZMW'000
2019
ZMW'000
2020
ZMW'000
2019
ZMW'000
2020
ZMW'000
2019
ZMW'000
651,560
474,202
266,405
270,116
(160,618)
(169,034)
105,787
101,082
USD'000
USD'000
USD'000
USD'000
USD'000
USD'000
USD'000
USD'000
40,294
38,490
16,476
21,925
(9,933)
(13,720)
6,542
8,205
The cropping division is the foundation of Zambeef's vertically integrated business model, providing raw material inputs for value-added processing within the Group and serving as a hedge against the depreciation of the Kwacha, due to its ability to generate US Dollar cash flow.
Revenue for the year was up 37% to ZMW652 million (2019: ZMW474 million) while overheads decreased by 5% to ZMW161 million (2019: ZMW169 million). An increase in cost of sales of 89% resulted in gross profit margin erosion from 57% in 2019 to 41% in 2020. Consequently, and despite a reduction in overheads by 28% in US Dollar terms, operating profit fell by 20% in US Dollar terms.
The summer harvest for soya beans totalled 37,616 tonnes versus 44,982 tonnes in 2019. Improved yields, pushed maize production to 24,065 tonnes, from 19,233 tonnes. The sale of Sinazongwe farm resulted in a reduction in the area of winter wheat planted from 7,047 hectares in 2019 to 5,485 hectares in 2020, with the harvest dropping by 22.4% to 39,077 tonnes (2019: 50,398 tonnes). The slight reduction in wheat yields by 0.4% followed erratic electricity supply.
Other businesses
REVENUE
GROSS PROFIT
OVERHEADS
EBIT
2020
ZMW'000
2019
ZMW'000
2020
ZMW'000
2019
ZMW'000
2020
ZMW'000
2019
ZMW'000
2020
ZMW'000
2019
ZMW'000
203,609
210,348
48,676
39,261
(23,450)
(23,900)
25,226
15,361
USD'000
USD'000
USD'000
USD'000
USD'000
USD'000
USD'000
USD'000
12,592
17,074
3,010
3,187
(1,450)
(1,940)
1,561
1,247
Total revenue from the Group's other business units decreased by 3% from ZMW210 million in 2019, to ZMW203 million this financial year. Despite the revenue reduction, gross profit increased by 24% and EBIT increased by 64% in Kwacha terms.
Flour Milling
Flour sales volumes for the year declined 25% due to reduced demand following price increments. The drastic drop in maize price at half-year meant that consumers had the option to buy cheaper maize products as a substitute. Despite a 5% drop in revenue, the milling division achieved a 16% growth in operating profit partly due to overhead reductions.
Zamleather
Zamshu shoe sales grew by 7% compared with the previous year. Revenues were up 12% on prior year due to pricing and increased wet-blue leather exports, despite a slowdown of export channels due to the onset of the COVID-19 pandemic. The pandemic also impacted local shoe sales following the suspension of school activities across the country. Zamleather margins increased by 160 basis points as the division sold more higher-grade leather and value-added shoes.
ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2020
Group
Note
2020
ZMW'000s2020
USD'000s2019
ZMW'000s2019
USD'000sRevenue
5
3,875,104
239,648
3,134,967
254,462
Net (loss)/gain arising from price changes in fair value of biological assets
16(a)
(14,381)
(889)
10,284
835
Cost of sales
(2,645,101)
(163,581)
(2,063,704)
(167,509)
Gross profit
1,215,622
75,178
1,081,547
87,788
Administrative expenses
(1,011,968)
(62,583)
(920,771)
(74,738)
Other income
6
6,877
425
433
35
Operating profit
7
210,531
13,020
161,209
13,085
Share of loss from equity accounted investment
(3,177)
(197)
(3,036)
(246)
Exchange gains on translating foreign currency transactions and balances
(137,705)
(8,516)
(36,730)
(2,981)
Finance costs
9
(92,322)
(5,709)
(82,790)
(6,720)
(Loss)/profit before taxation
(22,673)
(1,402)
38,653
3,138
Taxation charge
10
(112,957)
(6,986)
(2,780)
(226)
Group (loss)/income for the year from continuing operations
(135,630)
(8,388)
35,873
2,912
Profit/(loss) from discontinued operations
34
33,435
2,068
(17,379)
(1,411)
Group (loss)/income for the year
(102,195)
(6,320)
18,494
1,501
Note
2020
ZMW'000s
2020
USD'000s
2019
ZMW'000s
2019
USD'000s
Group (loss)/income attributable to:
Equity holders of the parent
(103,419)
(6,396)
18,100
1,469
Non-controlling interest
1,224
76
394
32
(102,195)
(6,320)
18,494
1,501
Other comprehensive income:
Items that may be reclassified
subsequently to profit or loss
Exchange gains/(losses) on translating presentational currency
625,042
(52,402)
106,391
(10,553)
Items that will not be reclassified
subsequently to profit or loss
Remeasurement of net defined benefit liability
6,229
385
8,829
717
Remeasurement of leases
315
20
-
-
Total other comprehensive income
631,586
(51,997)
115,220
(9,836)
Total comprehensive income/(loss) for the year
529,391
(58,317)
133,714
(8,335)
Total comprehensive income/(loss) for the year attributable to:
Equity holders of the parent
525,030
(58,661)
129,935
(8,367)
Non-controlling interest
4,361
344
3,779
32
529,391
(58,317)
133,714
(8,335)
Ngwee
Cents
Ngwee
Cents
Earnings per share
Basic earnings per share - continued operations
12
(45.12)
(2.79)
11.80
0.96
Basic earnings per share - discontinued operations
12
11.12
0.69
(5.78)
(0.47)
Total Basic earnings per share
12
(34.00)
(2.10)
6.02
0.49
Diluted earnings per share
Diluted earnings per share - continued operations
12
(45.12)
(2.79)
8.86
0.72
Diluted earnings per share - discontinued operations
12
11.12
0.69
(4.34)
(0.35)
Total Diluted earnings per share
12
(34.00)
(2.10)
4.52
0.37
ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2020
(i) In Zambian Kwacha
Issued share capital
ZMW'000s
Share premium
ZMW'000s
Preference share capital
ZMW'000s
Foreign exchange reserve
ZMW'000s
Revaluation reserve
ZMW'000s
Retained earnings
ZMW'000s
Total attributable to owners of the parent ZMW'000s
Non- controlling interest
ZMW'000s
Total equity
ZMW'000s
At 1 October 2019
3,006
1,125,012
1,000
278,923
1,228,724
479,109
3,115,774
(8,660)
3,107,114
Profit for the year
-
-
-
-
-
18,100
18,100
394
18,494
Transfer of surplus depreciation
-
-
-
-
(29,666)
29,666
-
-
-
Other comprehensive income:
Exchange gain/ (loss) on translating presentational currency
-
-
-
103,006
-
-
103,006
3,385
106,391
Remeasurement of net defined benefit liability
-
-
-
-
-
8,829
8,829
-
8,829
Total comprehensive income
-
-
-
103,006
(29,666)
56,595
129,935
3,779
133,714
At 30 September 2019
3,006
1,125,012
1,000
381,929
1,199,058
535,704
3,245,709
(4,881)
3,240,828
Adjustment on transition to IFRS 16
-
-
-
-
-
315
315
-
315
As at 1 October 2019
3,006
1,125,012
1,000
381,929
1,199,058
536,019
3,246,024
(4,881)
3,241,143
Loss for the year
-
-
-
-
-
(103,419)
(103,419)
1,224
(102,195)
Transfer of surplus depreciation
-
-
-
-
(31,345)
31,345
-
-
-
Other comprehensive income:
-
-
-
-
-
-
-
-
-
Exchange gain/ (loss) on translating presentational currency
-
-
-
621,905
-
-
621,905
3,137
625,042
Remeasurement of net defined benefit liability
-
-
-
-
-
6,229
6,229
-
6,229
Total comprehensive income
-
-
-
621,905
(31,345)
(65,845)
524,715
4,361
529,076
At 30 September 2020
3,006
1,125,012
1,000
1,003,834
1,167,713
470,174
3,770,739
(520)
3,770,219
(ii) In US Dollar
Issued share capital
USD'000s
Preference share capital
USD'000s
Share premium
USD'000s
Foreign exchange reserve
USD'000s
Revaluation reserve
USD'000s
Retained earnings
USD'000s
Total attributable to owners of the parent USD'000s
Non- controlling interest
USD'000s
Total equity
USD'000s
At 1 October 2018
449
100
185,095
(186,889)
175,617
80,188
254,560
(708)
253,852
Profit for the year
-
-
-
-
-
1,469
1,469
32
1,501
Transfer of surplus depreciation
-
-
-
-
(2,408)
2,408
-
-
-
Other comprehensive income:
Exchange gains on translating presentational currency
-
-
-
(10,859)
-
-
(10,859)
306
(10,553)
Remeasurement of net defined benefit liability
-
-
-
-
-
717
717
-
717
Total comprehensive income
-
-
-
(10,859)
(2,408)
4,594
(8,673)
338
(8,335)
At 30 September 2019
449
100
185,095
(197,748)
173,209
84,782
245,887
(370)
245,517
Adjustment on transition to IFRS 16
-
-
-
-
-
20
20
-
20
As at 1 October 2019
449
100
185,095
(197,748)
173,209
84,802
245,907
(370)
245,537
Loss for the year
-
-
-
-
-
(6,396)
(6,396)
76
(6,320)
Transfer of surplus depreciation
-
-
-
-
(1,938)
1,938
-
-
-
Other comprehensive income:
Exchange gains on translating presentational currency
-
-
-
(52,670)
-
-
(52,670)
268
(52,402)
Remeasurement of net defined benefit liability
-
-
-
-
-
385
385
-
385
Total comprehensive income
-
-
-
(52,670)
(1,938)
(4,073)
(58,681)
344
(58,337)
At 30 September 2020
449
100
185,095
(250,418)
171,271
80,729
187,226
(26)
187,200
ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2020
(i) In Zambian Kwacha
Issued share capital ZMW'000s
Preference share capital ZMW'000s
Share premium ZMW'000s
Revaluation reserve ZMW'000s
Foreign exchange reserve
ZMW'000s
Retained earnings ZMW'000s
Total equity
ZMW'000s
At 1 October 2018
3,006
1,000
1,125,012
890,335
268,121
502,828
2,790,302
Profit for the year
-
-
-
-
-
2,764
2,764
Transfer of surplus depreciation
-
-
-
(28,183)
-
28,183
-
Other comprehensive income:
Exchange gain on translating presentational currency
-
-
-
-
92,385
-
92,385
Remeasurement of net defined benefits liability
-
-
-
-
-
1,461
1,461
Total comprehensive income
-
-
-
(28,183)
92,385
32,408
96,610
At 30 September 2019
3,006
1,000
1,125,012
862,152
360,506
535,236
2,886,912
Profit for the year
-
-
-
-
-
26,838
26,838
Other comprehensive income:
Transfer of surplus depreciation
-
-
-
(33,614)
-
33,614
-
Remeasurement of net defined benefits liability
-
-
-
-
-
1,836
1,836
Exchange gain on translating presentational currency
-
-
-
-
609,324
-
609,324
Total comprehensive income
-
-
-
(33,614)
609,324
62,288
637,998
At 30 September 2020
3,006
1,000
1,125,012
828,538
969,830
597,524
3,524,910
ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2020 (CONTINUED)
(ii) In US Dollar
Issued share capital
USD'000s
Preference share capital
USD'000s
Share premium
USD'000s
Revaluation reserve
USD'000s
Foreign exchange reserve USD'000s
Retained earnings
USD'000s
Total equity
USD'000s
At 1 October 2018
449
100
185,095
118,696
(158,456)
82,082
227,966
Profit for the year
-
-
-
-
-
202
202
Transfer of surplus depreciation
-
-
-
(2,288)
-
2,288
-
Other comprehensive income:
Exchange gain on translating presentational currency
-
-
-
-
(9,603)
-
(9,603)
Remeasurement of net defined benefits Liability
-
-
-
-
140
140
Total comprehensive income
-
-
-
(2,288)
(9,603)
2,630
(9,261)
At 30 September 2019
449
100
185,095
116,408
(168,059)
84,712
218,705
Profit for the year
-
-
-
-
-
1,661
1,661
Other comprehensive income:
-
-
-
-
-
-
-
Transfer of surplus depreciation
-
-
-
(2,079)
-
2,079
-
Remeasurement of net defined benefits liability
-
-
-
-
-
114
114
Exchange losses on translating presentational currency
-
-
-
-
(45,460)
-
(45,460)
Total comprehensive income
-
-
-
(2,079)
(45,460)
3,854
(43,685)
At 30 September 2020
449
100
185,095
114,329
(213,519)
88,566
175,020
ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ‑ 30 SEPTEMBER 2020
ASSETS
Note
2020
ZMW'000s2020
USD'000s2019
ZMW'000s2019
USD'000sNon-current assets
Goodwill
13
166,801
8,282
166,801
12,636
Property, plant and equipment
14
3,264,505
162,091
2,841,824
215,290
Investment in associate
15(e)
43,826
2,176
12,376
938
Deferred tax asset
10(e)
9,552
474
56,525
4,282
3,484,684
173,023
3,077,526
233,146
Current assets
Biological assets
16
176,305
8,754
170,417
12,910
Inventories
17
1,103,640
54,798
941,159
71,300
Trade and other receivables
18
132,668
6,587
98,025
7,426
Assets held for disposal
34
175,654
8,722
135,357
10,254
Amounts due from related companies
19
9,337
464
41,554
3,148
Income tax recoverable
10(c)
1,784
89
2,767
210
Cash and cash equivalents
20
111,136
5,518
56,753
4,299
1,710,524
84,932
1,446,032
109,547
Total assets
5,195,208
257,955
4,523,558
342,693
EQUITY AND LIABILITIES
Capital and reserves
Share capital
21
3,006
449
3,006
449
Preference share capital
21
1,000
100
1,000
100
Share premium
22
1,125,012
185,095
1,125,012
185,095
Other reserves
2,641,721
1,582
2,116,691
60,243
3,770,739
187,226
3,245,709
245,887
Non-controlling interest
(520)
(26)
(4,881)
(370)
3,770,219
187,200
3,240,828
245,517
Note
2020
ZMW'000s2020
USD'000s2019
ZMW'000s2019
USD'000sNon-current liabilities
Interest bearing liabilities
23
190,218
9,445
228,099
17,280
Leases
24
19,750
981
19,297
1,462
Deferred liability
25
11,389
565
16,362
1,240
Deferred tax liability
10(e)
69,950
3,473
9,138
692
291,307
14,464
272,896
20,674
Current liabilities
Interest bearing liabilities
23
326,899
16,231
343,042
25,988
Leases
24
23,259
1,155
21,487
1,628
Trade and other payables
26
321,648
15,971
259,585
19,665
Provisions
27
113,347
5,629
52,914
4,009
Amounts due to related companies
28
443
22
251
19
Taxation payable
10(c)
41
2
1,377
104
Bank overdrafts
20
348,045
17,281
331,178
25,089
1,133,682
56,291
1,009,834
76,502
Total equity and liabilities
5,195,208
257,955
4,523,558
342,693
ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES
COMPANY STATEMENT OF FINANCIAL POSITION ‑ 30 SEPTEMBER 2020
ASSETS
Note
2020
ZMW'000s2020
USD'000s2019
ZMW'000s2019
USD'000sNon-current assets
Property, plant and equipment
14
2,476,394
122,959
2,060,110
156,069
Investments in subsidiaries
15(b)
245,807
12,205
245,807
18,622
Investment in associate
15(e)
43,826
2,176
12,376
938
Deferred tax asset
10(e)
-
-
-
-
2,766,027
137,340
2,318,293
175,629
Current assets
Biological assets
16
139,501
6,927
137,215
10,395
Inventories
17
814,081
40,421
683,600
51,788
Assets held for disposal
34
175,654
8,722
135,357
10,254
Trade and other receivables
18
50,555
2,510
28,153
2,133
Amounts due from related companies
19
1,320,117
65,547
1,078,745
81,722
Income tax recoverable
10(c)
565
28
1,529
115
Cash and cash equivalents
20
12,645
628
11,844
897
2,513,118
124,783
2,076,443
157,304
Total assets
5,279,145
262,123
4,394,736
332,933
EQUITY AND LIABILITIES
Capital and reserves
Share capital
21
3,006
449
3,006
449
Preference share capital
21
1,000
100
1,000
100
Share premium
22
1,125,012
185,095
1,125,012
185,095
Other reserves
2,395,892
(10,624)
1,757,894
33,061
3,524,910
175,020
2,886,912
218,705
Note
2020
ZMW'000s2020
USD'000s2019
ZMW'000s2019
USD'000sNon-current liabilities
Interest bearing liabilities
23
190,218
9,445
228,099
17,280
Leases
24
8,172
406
11,505
872
Deferred liability
25
3,356
167
3,655
277
Deferred tax liability
10(e)
41,153
2,043
6,630
502
242,899
12,061
249,889
18,931
Current liabilities
Interest bearing liabilities
23
326,899
16,231
343,042
25,988
Leases
24
14,461
718
18,266
1,384
Trade and other payables
26
232,844
11,561
158,504
12,008
Provisions
27
61,200
3,039
40,462
3,065
Amounts due to related companies
28
705,110
35,011
490,045
37,124
Bank overdrafts
20
170,822
8,482
207,616
15,728
1,511,336
75,042
1,257,935
95,297
Total equity and liabilities
5,279,145
262,123
4,394,736
332,933
ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
Note
2020
ZMW'000s2020
USD'000s2019
ZMW'000s2019
USD'000sCash inflow from operating activities
(Loss)/profit before taxation
(22,673)
(1,402)
38,653
3,138
Finance costs
9
92,322
5,709
82,790
6,720
Loss / (profit) on disposal of property, plant and equipment
4,796
297
(986)
(80)
Depreciation
14
141,408
8,745
121,921
9,896
Charge on right of use assets
14
8,362
517
-
-
Share of loss on equity accounted investment
3,177
196
3,036
246
Profit/(loss) on discontinued operations
1,529
95
(17,379)
(1,411)
Fair value price adjustment
16
14,381
889
(10,284)
(835)
Net unrealised foreign exchange losses
192,501
11,905
7,153
581
Earnings before interest, tax, depreciation and amortisation, fair value adjustments and net unrealised foreign exchange losses
435,803
26,951
224,904
18,255
(Increase)/decrease in biological assets
(20,269)
(1,253)
21,541
1,748
Increase in inventory
(162,481)
(10,048)
(301,348)
(24,460)
(Increase)/decrease in trade and other receivables
(34,643)
(2,142)
58,289
4,731
(Increase)/decrease in amounts due from related companies
(2,410)
(149)
8,718
708
Increase/(decrease) in trade and other payables
122,496
7,575
(27,028)
(2,194)
Increase in amounts due to related companies
192
12
19
2
Decrease in deferred liability
(4,973)
(308)
(6,249)
(507)
Income tax paid
10(c)
(5,525)
(342)
(9,652)
(783)
Net cash inflow/(outflow) from/(on) operating activities
328,190
20,296
(30,806)
(2,500)
Investing activities
Purchase of property, plant and equipment
14
(92,664)
(5,731)
(113,825)
(9,239)
Right of use assets
14
(15,425)
(954)
-
-
Proceeds from the sale of assets
6,452
399
11,776
956
Proceeds from the sale of assets/investments
167,264
10,344
-
-
Net cash inflow/(outflow) from /(on) investing activities
65,627
4,058
(102,049)
(8,283)
Note
2020
ZMW'000s2020
USD'000s2019
ZMW'000s2019
USD'000sNet cash inflow/ (outflow) before financing activities
393,817
24,354
(132,855)
(10,783)
Financing activities
Long term loans repaid
29
(162,217)
(10,032)
(96,913)
(7,866)
Repayment short term funding
29
(623,231)
(38,542)
(215,124)
(17,461)
Receipt of short-term funding
29
487,320
30,137
334,580
27,157
Lease finance repayment
29
(35,478)
(2,194)
(47,007)
(3,816)
Lease finance obtained
29
14,329
886
47,714
3,873
Finance costs
9
(92,322)
(5,709)
(82,790)
(6,720)
Net cash outflow on financing activities
(411,599)
(25,454)
(59,540)
(4,833)
Decrease in cash and cash equivalents
(17,782)
(1,100)
(192,395)
(15,616)
Cash and cash equivalents at beginning of the year
(274,425)
(20,790)
(135,743)
(11,090)
Effects of exchange rate changes on the balance of cash held in foreign currencies
55,300
10,127
53,713
5,916
Cash and cash equivalents at end of the year
20
(236,909)
(11,763)
(274,425)
(20,790)
Represented by:
Cash in hand and at bank
20
111,136
5,518
56,753
4,299
Bank overdrafts
20
(348,045)
(17,281)
(331,178)
(25,089)
(236,909)
(11,763)
(274,425)
(20,790)
ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2020
Note
2020
ZMW'000s2020
USD'000s2019
ZMW'000s2019
USD'000sCash inflow from operating activities
Profit before taxation
34,203
2,115
54,334
4,389
Finance costs
68,747
4,252
67,371
5,469
Depreciation
14
80,462
4,976
71,049
5,767
Fair value price adjustment
16
15,464
956
(10,162)
(825)
Loss on disposal of property, plant and equipment
1,216
75
1,821
148
Share of loss on equity accounted investment
3,177
196
3,036
246
Loss on discontinued operations
1,529
96
(17,379)
(1,411)
Net unrealised foreign exchange differences
90,962
5,626
6,223
505
Earnings before interest, tax, depreciation and amortisation
295,760
18,292
176,293
14,288
(Increase)/ decrease in biological assets
(2,286)
(141)
31,296
2,541
Increase in inventory
(130,482)
(8,069)
(202,281)
(16,419)
(Increase)/decrease in trade and other receivables
(26,184)
(1,619)
63,228
5,133
Increase in amounts due from related companies
(202,963)
(12,552)
(282,239)
(22,910)
Increase/ (decrease) in trade and other payables
95,078
5,880
(31,817)
(2,583)
Increase in amounts due to related companies
215,065
13,300
161,412
13,102
(Decrease)/ increase in deferred liability
(299)
(18)
57
26
Income tax paid
10(c)
(5,314)
(329)
(5,822)
(473)
Net cash inflow/(outflow) from/(on) operating activities
238,375
14,744
(89,873)
(7,295)
Investing activities
Purchase of property, plant and equipment
14
(35,385)
(2,188)
(23,743)
(1,927)
Proceeds from disposal of investment
167,264
10,344
-
-
Proceeds from sale of assets
4,205
260
1,120
91
Net cash inflow/(outflow) from/(on) investing activities
136,084
8,416
(22,623)
(1,836)
Note
2020
ZMW'000s2020
USD'000s2019
ZMW'000s2019
USD'000sNet cash inflow before financing activities
374,459
23,160
(112,496)
(9,131)
Financing activities
Long term loans repaid
29
(162,217)
(10,032)
(96,913)
(7,866)
Short term funding repaid
29
(623,231)
(38,542)
(215,124)
(17,461)
Short term funding obtained
29
487,320
30,137
334,580
27,157
Lease finance repayment
29
(30,835)
(1,907)
(43,953)
(3,568)
Lease finance obtained
29
14,329
886
47,714
3,873
Interest paid
(68,747)
(4,252)
(67,371)
(5,469)
Net cash outflow on financing activities
(383,381)
(23,710)
(41,067)
(3,334)
Decrease in cash and cash equivalents
(8,922)
(550)
(153,563)
(12,465)
Cash and cash equivalents at beginning of the year
(195,772)
(14,381)
(76,971)
(6,288)
Effects of exchange rate changes on the balance of cash held in foreign currencies
46,517
7,077
34,762
3,922
Cash and cash equivalents at end of the year
20
(158,177)
(7,854)
(195,772)
(14,831)
Represented by:
Cash in hand and at bank
20
12,644
628
11,844
897
Bank overdrafts
20
(170,821)
(8,482)
(207,616)
(15,728)
(158,177)
(7,854)
(195,772)
(14,831)
NOTES TO THE FINANCIAL STATEMENTS ‑ 30 SEPTEMBER 2020
Notes can be read via the following link to the full Financial Statements:
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