REG - Zambeef Products PLC - Full Year Trading Update

Zambeef ProductsAnnouncement

22/11/2024 07:00

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RNS Number : 2354N  Zambeef Products PLC  22 November 2024

 

Zambeef Products plc

 

("Zambeef" or the "Group")

 

Full 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.

 

The Group announces that, for the year ended 30 September 2024 (all amounts in
USD), revenue, adjusted EBITDA, adjusted and reported PBT are all anticipated
to be in line with current market expectations due to underlying operational
performance, despite a challenging economic and operating environment.
Pleasingly, adjusted and reported profit after tax is expected to be higher
than current market expectations, benefiting from a reduced tax impact for
reasons including the benefit of the Group restructuring as announced in
September 2023.

 

The macroeconomic conditions leading up to September 2024 were characterized
by difficult operating circumstances, including, as previously announced, a
severe drought and reduced consumer spending, compounded by the Central Bank's
tightening monetary policy to address inflationary risks and constrained
government spending. These factors significantly limited kwacha liquidity in
the economy, leading to lower-than-expected demand for our products. The
outbreak of Anthrax restricted cattle movement and negatively impacted public
perception, slowing beef volumes in the first quarter. However, we saw a
recovery in beef volumes, as bans on animal movement were lifted, from the
second to the fourth quarter due to improved availability.

 

Furthermore, diminished water levels impacted Zambia's hydropower generation
which accounts for 85% of the country's electricity.  The government
initiated an aggressive countrywide load management program that necessitated
the use of more expensive alternative energy sources.

 

This, along with the sustained devaluation of the local currency from
K21.02/USD at the beginning of the financial year to K26.54/USD at the end of
the period along with an average inflation rate rising to 15.6%, contributed
significantly to the high input and overhead costs.

 

Despite these challenges, the business remained focused on its primary
strategy of revenue enhancement, cost optimization, and volume growth.

 

The Group expects its results for the financial year ended 30 September 2024
to be released by the end of December 2024. Shareholders are advised that the
information contained in this Trading Update has not been reviewed nor
reported on by the Company's external auditors.

 

* Adjusted EBITDA, adjusted profit before tax and adjusted profit after tax
exclude the cost of the expected impairment in full (c.USD1.4m), as previously
disclosed in the Company's announcement of 23 April 2024, of the investment in
an associate (Zampalm) in which the Group owns a 10% equity interest, and
which remains in operation. In addition, adjusted profit after tax also
excludes the loss from assets held for sale (Chiawa Farm).

 

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
 Patrick Kalifungwa, Chief Financial Officer
 Cavendish Capital Markets Ltd (Nominated Adviser and Broker)  Tel: +44 (0) 20 7220 0500
 Ed Frisby/Abigail Kelly (Corporate Finance)
 Tim Redfern (ECM)
 Autus Securities Limited                                      Tel: +260 (0) 761 002 002
 Mataka Nkhoma, Sponsoring Broker

 

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.

 

 

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 10.6 million broilers and 31.8
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 7,265 hectares of row crops under irrigation, which are
planted twice a year, and a further 8,000 hectares of rainfed/dry-land crops
available for planting. www.zambeefplc.com (http://www.zambeefplc.com/)

 

 

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