REG - Zambeef Products PLC - Interim Results
15/06/2022 15:30
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RNS Number : 0252P Zambeef Products PLC 15 June 2022
15 June 2022
Zambeef Products plc
("Zambeef" or the "Group")
Interim results for the Half Year Ended 31 March 2022
Zambeef (AIM: ZAM), the fully integrated cold chain foods and retail business
with operations in Zambia, Nigeria and Ghana, today announces its results for
the half-year ended 31 March 2022.
Financial Highlights
Figures in 000's 2022 2021 % 2022 2021 %
ZMW ZMW USD USD
Revenue 2,568,680 2,150,473 19.4% 148,136 102,501 44.5%
Cost of sales (1,715,287) (1,411,049) 21.6% (98,921) (67,257) 47.1%
Gross profit 853,393 739,424 15.4% 49,215 35,244 39.6%
Administrative expenses (622,986) (584,654) 6.5% (35,928) (27,867) 28.9%
Operating profit 230,407 154,770 48.9% 13,287 7,377 80.1%
Profit from asset held for sale 10,330 - 596 - -
Share of profit equity accounted investment (1,287) (915) 40.7% (74) (44) 68.2%
Exchange losses 113 (42,558) 100.3% 7 (2,029) 100.3%
Finance costs (58,413) (56,360) 3.7% (3,369) (2,686) 25.4%
Profit before taxation 181,150 54,937 229.7% 10,447 2,618 299.0%
Taxation charge (33,587) (21,846) 53.7% (1,937) (1,041) 86.1%
Profit for the period from continued operations 147,563 33,091 345.9% 8,510 1,577 439.6%
Profit from discontinued operations - 20,843 - - 993 -
Total profit for the period 147,563 53,934 173.6 8,510 2,570 231.1%
EBITDA 310,422 193,398 60.51% 17,902 9,217 94.2%
Gross Profit Margin 33.2% 34.4% 33.2% 34.4%
EBITDA Margin 12.1% 9.0% 12.1% 9.0%
Debt/Equity (Gearing) 14.9% 25.4% 14.92% 25.43%
Debt-To-EBITDA 1.91 5.19% 1.83 4.93
PERFORMANCE OVERVIEW
The period saw relative macroeconomic stability with the kwacha appreciating
relative to the US Dollar and inflation on a steady downward trajectory.
However, input costs to our livestock division increased as a result of
increasing commodity prices and fuel costs. Together with a tight monetary
policy, this resulted in constrained consumer spending which affected the
demand for our products.
However, the Group posted results that were ahead of market expectations (with
this improved performance being notified in the Company's Trading Update
announcement of 27 April 2022), driven by good performance in our cropping and
stockfeed division and continued focus on cost control. Market share gains and
increased Layer feed prices in our stock feed business resulted in increased
profitability and sustained margins.
Zambeef's chain of 237 retail outlets, both own-brand and within Shoprite
supermarkets, remain at the heart of the business, with demand from consumers
driving supply.
KEY FINANCIAL HIGHLIGHTS
Revenue measured in at ZMW2.6 billion (USD148.1 million) with a gross profit
of ZMW853.4 million (USD49.2 million), a growth of 19% and 15% when compared
to the previous corresponding period in kwacha terms as well as 45% and 40% in
USD terms respectively.
The Group's topline performance was due to performance in Cropping and
Stockfeed. Higher grain prices, stockfeed market share gains and good farming
interventions enabled the business to post profitability. Cost pressures
stemming from covid related global supply chain desruptions, fuel costs and
subdued demand on our protein products resulted in margin erosion.
Management continued the cost optimisation agenda through streamlining
administrative costs while the continued direct cost control measures helped
deliver strong operating profit leverage.
The Group combined strength as a diversified and vertically integrated
business with strong brands, supportive partners and an experienced management
team continues to be a major factor on the sustained profitability of the
Group.
Commenting on these results, Mr Michael Mundashi said:
"The Group faced margin pressure arising from a rise in input costs such as
Soya and energy across our value chains. However, our diversified portfolio of
brands and vertically integrated businesses ensured the impact is balanced
across the divisions, thereby enabling the overall growth in Group
profitability.
The Board believes the key to sustainable growth lies in remaining committed
to its strategic priorities, while mitigating the effects of dynamic economic
and climate cycles. As such, the focus remains to invest in growth and
optimisation opportunities and invest in our core businesses and the
divestiture of non-core businesses. The vertical and horizontal integrated
business structure remains essential to sustained profitability growth and
balancing economic and climatic cyclicity.
"We anticipate macro-economic stability for Zambia to continue over the medium
term supported by improved investor sentiment, elevated copper prices and the
possibility of an International Monetary Fund supported debt management
program. The kwacha is expected to remain relatively stable supported by
increased mining output.
The copper price, which is a major foreign exchange earner for the country, is
expected to continue holding as the global economy continues to recover from
the Covid-19 related shocks. The inflation rate is expected to continue on the
downward trajectory, although the outcome of the Russo-Ukrainian tensions will
lead to further rises in global food and energy prices which still pose a risk
of higher inflation locally. The world at large and Zambia in particular, have
acclimatised to living with the Covid-19 pandemic. Therefore, we expect
Covid-19 related shocks to the business and the economy to remain minimal."
For further information, please visit www.zambeefplc.com or contact:
Zambeef Products plc Tel: +260 (0) 211 369003
Walter Roodt, Chief Executive Office
Faith Mukutu, Chief Financial Officer
finnCap (Nominated Adviser and Broker) Tel: +44 (0) 20 7220 0500
Ed Frisby/Tim Harper (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, eggs, 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 and egg
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.
CHAIRMAN'S REPORT
Dear Shareholder,
It is my great pleasure to present to you the Chairman's Report with respect
to the half year ended 31 March, 2022.
The period saw relative macroeconomic stability with the kwacha appreciating
relative to the US Dollar and inflation on a steady downward trajectory.
However, input costs to our livestock division increased as a result of
increasing commodity prices and fuel costs. Together with a tight monetary
policy, this resulted in constrained consumer spending which affected the
demand for our products. Despite these headwinds, the Group posted results
that were ahead of market expectations (with this improved performance being
notified in the Company's Trading Update announcement of 27 April 2022),
driven by good performance in our cropping and stockfeed division and
continued focus on cost control.
The Group faced margin pressure arising from a rise in input costs such as
Soya and energy across our value chains. However, our diversified portfolio of
brands and vertically integrated businesses ensured the impact is balanced
across the divisions, thereby enabling the overall group to profitability
growth.
The Group generated an operating profit, including profit from asset held for
sale, of ZMW240.7 million (USD13.8 million) compared to ZMW175.6million
(USD8.4 million) in the prior financial year. The operating profit, excluding
profit from asset held for sale, was ZMW230.4 million (USD13.3 million)
compared to ZMW154.8 million (USD7.4 million) achieved in the previous
financial year. Profit before tax was ZMW181.1 million (USD10.4 million)
compared to ZMW54.9 million (USD2.6 million) achieved in the prior financial
year. The Group's performance in the face of headwinds illustrates the
strengths of our vertically integrated business model, the strength of our
brands and a good management team.
The Board believes the key to sustainable growth lies in remaining committed
to its strategic priorities, while mitigating the effects of dynamic economic
and climate cycles. As such, the focus remains to invest in growth and
optimisation opportunities and invest in our core businesses and the
divestiture of non-core businesses. The vertical and horizontal integrated
business structure remains essential to sustained profitability growth and
balancing economic and climatic cyclicity.
The Economic Environment
The Zambian economy saw signs of macroeconomic recovery, following the
successful general elections which resulted in positive market sentiments and
a positive economic outlook. The Zambian kwacha remained relatively stable,
with elements of volatility being seen at the end of both the first and second
quarters. The strength of the currency was supported by foreign participation
in the bond market and a higher copper price on the international commodity
market.
Despite recovery in the global economy, the Zambian economic recovery remains
gradual, given the high debt burden and reduced consumer spending.
Inflationary pressures, particularly food inflation, had resulted in a
significant drop in our customers' disposable income and has continued to put
pressure on the consumers' share of wallet going towards food spend. However,
inflation continued on the downward trend for the period under review closing
at 13.1% compared to 22.8% for the previous financial year, supported mainly
by a reduction in food inflation rates as it came off a high base from the
previous year. This however did not offset steep cold chain foods sales volume
losses for the half-year period.
Retail and Cold Chain Food Products
Revenue in the Retail and Cold Chain Food business grew by 11% to ZMW2.6
billion with operating profit growth of 26% to ZMW96 million, supported by
sustained revenue management and cost control in light of margin pressure due
to a reduction in demand in the face of rising input costs.
Rising global food prices, particularly grain, precipitated in high animal
feed costs. As a result, the division saw margin pressures across most protein
categories as feed is a significant cost in primary protein production.
The Poultry business saw demand reduction owing to sustained chicken price
escalations, which resulted in consumers downgrading to cheaper protein
sources. Management has responded and implemented measures that are expected
to see a recovery in the second half-year period.
Cropping and Milling (Cropping, Stockfeed and Wheat Milling)
Zambia experienced a late onset to the summer rainfall season, and as a
result, yields for the summer crop declined. However, favourable grain prices
deliver strong growth.
The first quarter resulted in below expected stockfeed sales volumes with the
second quarter showing strong gains in market share due to Stockfeed strong
raw material position.
Debt reduction
During the half year period, the Group continued to deleverage by making
repayments on debt obligations as they became due and utilising the internally
generated cash to reduce our short-term debt. Net debt for the half year
period closed at ZMW592 million (USD33million) from ZMW715 million
(USD46million) as at 30 September 2021. The resultant balance sheet positions
the Group with capacity to finance efficiency upgrades and production capacity
expansion.
The steps that management took in 2021, to restructure the Company's debt
profile by replacing the majority USD debt with kwacha debt to match the
primary revenue base currency to the Company's debt service profile is
beginning to yield results. We now have greater certainty of committed debt
repayment amounts which has resulted in significantly reduced exchange rate
risks.
Outlook
We anticipate macro-economic stability for Zambia to continue over the medium
term supported by improved investor sentiment, elevated copper prices and the
possibility of an International Monetary Fund supported debt management
program. The kwacha is expected to remain relatively stable supported by
increased mining output.
The copper price, which is a major foreign exchange earner for the country, is
expected to continue holding as the global economy continues to recover from
the Covid-19 related shocks. The inflation rate is expected to continue on the
downward trajectory, although the outcome of the Russo-Ukrainian tensions will
lead to further rises in global food and energy prices which still pose a risk
of higher inflation locally. The world at large and Zambia in particular, have
acclimatised to living with the Covid-19 pandemic. Therefore, we expect
Covid-19 related shocks to the business and the economy to remain minimal.
The Group remains committed to delivering value to shareholders and is well
positioned to navigate the turmoil while capitalising on opportunities.
Strategy
Following the strategy reset process of 2021, I am happy to report that the
board remains committed to and is on track in implementing the strategic
imperatives. The following are the pillars on which the five year strategy was
underpinned:
§ Focus and strengthen our core business by investing in capacity and grow
market share
§ Divestiture of non-core assets to free up resources
§ Develop a human capital strategy that aligns with business objectives
§ Strengthen our strategic partnerships
§ Enhancement of shareholders value
Acknowledgement
On behalf of the Company and the Board of Directors, I would like to express
my sincere gratitude to Yollard Kachinda and Frank Braeken who resigned from
the board on 14 April 2022 and 27 May, 2022, respectively. Their dedication
and contributions to the business during the period they served as directors
will be greatly missed.
I also thank my fellow board members for steering the Group through the first
half of the year and positioning it for the next phase of growth. To our
management and staff, I express my gratitude to them for another solid
performance, dedicated efforts and resilience in the face of challenges. I am
proud of our achievements to date and I am excited by the potential
opportunities upon which we will build our future progress.
Michael Mundashi
Chairman
15 June 2022
CHIEF EXECUTIVE OFFICER'S REVIEW
Overview
Despite the 2022 half-year period being characterised by difficult trading
conditions, the Group results exceeded market expectations, as previously
announced, due to the performance in the Cropping and Milling division. Higher
grain prices and Stockfeed market share gains enabled the business to post
strong profits. However, in light of the macroeconomic fundamentals
stabilising, the reduced consumer spend on the back of a rise in input costs
put pressure on volumes and margins in the Retail and Cold Chain Food Products
(CCFP) segment. The increase in raw material input costs, such as soya and
wheat, negatively impacted primary protein and milling production costs with
the consequent increase in food prices to our customers resulting in reduced
demand for our products as customers traded down, particularly in the first
quarter of the financial year. The second quarter saw a slight volume recovery
in the Retail and CCFP segments as management responded to the changing
commercial environment.
The Group posted revenue, including from assets held for sale, of ZMW2.6
billion (USD150 million) and we achieved a gross profit of ZMW884 million
(USD51 million), being 16% and 13% above the prior year in kwacha terms, and
40% and 37% growth in USD terms, respectively.
The Group's strong performance was driven by the Cropping and Milling
division. Management continued optimising top line growth through revenue
management initiatives while the continued cost control measures helped
deliver a robust operating profit performance.
Our diversified and vertically integrated business with strong brands,
supportive partners and an experienced management team helped deliver
encouraging results during the first half-year of the 2022 reporting period.
Strategic focus
Our strategic focus remains to optimise our asset utilisation and maximise
returns. We remain committed to focusing on our existing core businesses, in
which we strive to be the best in class, continued divesture of non-core
assets and a fit for purpose people strategy. As part of delivering on our
strategic imperatives, the business will progressively turn towards capacity
expansion opportunities across our business, which will see increased
profitability in the medium to long term.
Outlook
The macroeconomic environment is expected to remain stable. The successful
holding of general elections on 12 August 2021 and the resultant change in
government during a peaceful transition of power has brought investor
confidence and optimism. The consequent appreciation of the kwacha continued
during the half year as foreign direct investment prospects improved. This
coupled with high copper prices, a potential International Monetary Fund (IMF)
Country program and reliable electricity supply has improved the country's
economic outlook. We expect a continued slowdown in inflation and reduced
interest rates. As a result, we look forward to increased economic activity
translating into sustained macroeconomic stability.
Our strong brands will help us maintain customer loyalty while the vertically
integrated business model positions us well to secure both supply and a market
for our products. The future recovery in the economy and a strong management
team have positioned us well for improved stakeholder value creation in the
coming years.
The Russo-Ukraine conflict poses risks but at the same time presents
opportunities for our business. The consequent rise in input costs such as
fertiliser and energy could negatively impact our profitability while the rise
in commodity prices, such as wheat and soya, will benefit our Cropping and
Milling division.
ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES
CHIEF EXECUTIVE OFFICER'S REVIEW (CONTINUED)
Divisional Performance
Table 1 (ZMW) and Table 2 (USD) below provide a summary of the consolidated
performance of the key business divisions reported at an operating profit
level.
Table 1: Divisional financial summary in ZMW'000
ZMW Revenue Gross Profit Overheads Operating Profit
Division 2022 2021 2022 2021 2022 2021 2022 2021
ZMW'000
ZMW'000
ZMW'000
ZMW'000
ZMW'000
ZMW'000
ZMW'000
ZMW'000
Retail & 2,631,327
CCFP
2,367,486 399,734 387,745 (303,646) (311,636) 96,088
7
6
,
1
0
9
Cropping & Milling
1,382,510 1,032,887 453,659 351,679 (200,580) (182,289) 253,079 169,390
Total 4,013,837 3,400,373 853,393 739,424 (504,226) (493,925) 349,167 245,499
Less: Intra/
Inter Group (1,445,157) (1,249,900)
- - - - -
Sales
Central
Overhead (118,760) (90,729) (118,760) (90,729)
Group Total 2,568,680 2,150,473 853,393 739,424 (622,986) (584,654) 230,407 154,770
Table 2: Divisional financial summary in USD'000
USD Revenue Gross Profit Overheads Operating Profit
Division 2022 2021 2022 2021 2022 2021 2022 2021
USD'000
USD'000
USD'000
USD'000
USD'000
USD'000
USD'000
USD'000
Retail & 151,748 112,845 23,053 18,481 (17,512) (14,853) 5,541 3,628
CCFP
Cropping & Milling
79,730 49,232 26,162 16,763 (11,567) (8,689) 14,595 8,074
Total 231,478 162,077 49,215 35,244 (29,079) (23,542) 20,136 11,702
Less: Intra/
Inter Group (83,342) (59,576)
Sales
Central
Overhead (6,849) (4,325) (6,849) (4,325)
Group Total 148,136 102,501 49,215 35,244 (35,928) (27,867) 13,287 7,377
ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES
CHIEF EXECUTIVE OFFICER'S REVIEW (CONTINUED)
Taking the performance of each of our key business areas in turn:
Retail and Cold Chain Food Products
Sales volumes came under pressure on the back of input price increases that
reduced consumer spending on proteins and oils and resulting in the trading
down to cheaper nutritional alternatives. The resulting strong supply
situation across all protein categories necessitated price reductions in the
second quarter which started to contribute to a volume recovery. March 2022
saw the outbreak of African Swine Fever in Lusaka Province which resulted in
our pork processing operation being shut down and therefore started to impact
on volumes. Chicken sales volumes struggled as the price of chicken products
remained relatively high compared with other proteins due to sustained high
feed prices.
Despite the challenges, the Retail and CCFP business registered a revenue
growth of 11% above the prior year. However, higher input prices, particularly
feed and fuel, resulted in margin erosion, thereby posting gross profit growth
of only 3%.
The Retail and CCFP division generated an EBIT margin of 3.7% which increased
by 43.9 basis points from the previous financial year to ZMW96 million (2021:
ZMW76 million) in kwacha terms and grew impressively by 53% to USD5.5 million
(2021: USD3.6 million) in dollar terms. Overhead spend discipline ensured
strong operating profit leverage. Reduced load shedding helped lower fuel
costs of running our electricity generators, which further contributed to the
increased profitability.
Cropping and Milling (Cropping, Stockfeed and Wheat Milling)
The summer farming season started off poorly due to the delay in the onset of
summer rains which impacted on summer crop yields. However, high world grain
prices enabled the business to post better than expected results.
The Stockfeed milling business was a major contributor to profitability in the
division due to market share gains owing to good sales and operations
planning.
Revenue in the Cropping and Milling division grew by 34% in kwacha terms and
62% in USD terms, while the operating profit grew by 49% to ZMW 253 million
(2021: ZMW169 million) or 81% to USD14.6 million (2021: USD8.1 million) in
dollar terms. Production costs were impacted by rising costs of inputs,
particularly fertiliser and other inputs.
Walter Roodt
Chief Executive Officer
15 June 2022
ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE SIX MONTH PERIOD ENDED 31 MARCH 2022
Unaudited Audited
31 Mar 2022 31 Mar 2021 30 Sept 2021
Group ZMW'000s ZMW'000s ZMW'000s
Revenue 2,568,680 2,150,473 4,974,351
Net profit arising from price changes in fair value of biological assets 5,273 17,242 6,651
Cost of sales (1,720,560) (1,428,291) (3,510,286)
Gross profit 853,393 739,424 1,470,716
Administrative expenses (597,097) (554,461) (1,150,658)
Distribution costs (29,850) (33,114) (66,848)
Other income 3,961 2,921 14,120
Operating profit 230,407 154,770 267,330
Share of loss equity accounted investment (1,287) (915) (3,358)
Profit from asset held for sale 10,330 - 31,949
Exchange gains/(losses) on translating foreign currency transactions and 113 (42,558) 23,332
balances
Finance costs (58,413) (56,360) (115,282)
Profit before taxation 181,150 54,937 203,971
Taxation charge (33,587) (21,846) (35,148)
Profit/(loss) for the period from continued operations 147,563 33,091 168,823
Profit from discontinued operations - 20,843 -
Total profit for the period 147,563 53,934 168,823
Profit/(loss) attributable to:
Equity holders of the parent 146,754 54,056 167,980
Non-controlling interest 809 (122) 843
147,563 53,934 168,823
Other comprehensive income
Exchange gains/(losses) on translating presentational currency (28,156) 117,226 (286,645)
Remeasurement of net defined benefit liability - - (2,813)
Revaluation of assets - - 192,403
Total other comprehensive income 119,407 117,226 (97,055)
Total comprehensive income for the period 119,407 171,160 71,768
Total comprehensive income for the period attributable to:
Equity holders of the parent 121,786 173,523 73,867
Non-controlling interest (2,379) (2,363) (2,099)
119,407 171,160 71,768
Earnings per share Ngwee Ngwee Ngwee
Basic earnings per share from continued operations 45.39 11.05 55.89
Basic earnings per share from discontinued operations 3.44 6.93 -
Total 48.83 17.98 55.89
ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE SIX MONTH PERIOD ENDED 31 MARCH 2022
Unaudited Audited
31 Mar 2022 31 Mar 2021 30 Sept 2021
Group USD'000s USD'000s USD'000s
Revenue 148,136 102,501 235,528
Net proft arising from price changes in fair value of biological assets 304 822 315
Cost of sales (99,225) (68,079) (166,207)
Gross profit 49,215 35,244 69,636
Administrative expenses (34,435) (26,428) (54,482)
Distribution costs (1,721) (1,578) (3,165)
Other income 228 139 669
Operating profit 13,287 7,377 12,658
Share of loss equity accounted investment (74) (44) (160)
Profit from asset held for sale 596 - 1,513
Exchange gains/(losses) on translating foreign currency transactions and 7 (2,029) 1,105
balances
Finance costs (3,369) (2,686) (5,458)
Profit before taxation 10,447 2,618 9,658
Taxation charge (1,937) (1,041) (1,663)
Profit/(loss) for the period from continued operations 8,510 1,577 7,995
Profit from asset held for sale - 993 -
Total profit for the period 8,510 2,570 7,995
Profit/(loss) attributable to:
Equity holders of the parent 8,463 2,577 7,955
Non-controlling interest 47 (7) 40
8,510 2,570 7,995
Other comprehensive income
Exchange (losses)/gains on translating presentational currency (18,552) (11,265) 25,338
Remeasurement of net defined benefit liability - - (133)
Revaluation of assets - - 9,110
Total other comprehensive income (18,552) (11,265) 34,315
Total comprehensive income for the period (10,042) (8,695) 42,310
Total comprehensive income for the period attributable to:
Equity holders of the parent (9,921) (8,581) 42,440
Non-controlling interest (121) (114) (130)
(10,042) (8,695) 42,310
Earnings per share Cents Cents Cents
Basic earnings per share from continued operations 2.62 0.53 2.65
Basic earnings per share from discontinued operations 0.20 0.33 -
Total 2.82 0.86 2.65
ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTH PERIOD ENDED 31 MARCH 2022
Share capital Share premium Preference share capital Revaluation reserve Foreign exchange Retained earnings Total attributable to owners of the parent Non-controlling interest Total equity
translation reserve
ZMW'000s ZMW'000s ZMW'000s ZMW'000s ZMW'000s ZMW'000s ZMW'000s ZMW'000s ZMW'000s
At 1 October 2020 3,006 1,125,012 1,000 1,167,713 1,003,834 470,174 3,770,739 (520) 3,770,219
Loss for the period - - - - - 54,056 54,056 (122) 53,934
Transfer of surplus depreciation - - - (23,141) - 23,141 - - -
Other comprehensive income:
Exchange gains on translating presentational currency - - - - 119,467 - 119,467 (2,241) 117,226
Total comprehensive income for the period - - - (23,141)) 119,467 77,197 173,523 (2,363) 171,160
At 31 March 2021 3,006 1,125,012 1,000 1,144,572 1,123,301 547,371 3,944,262 (2,883) 3,941,379
Profit for the period - - - - - 113,924 113,924 965 114,889
Transfer of surplus depreciation - - - (21,236) - 21,236 - - -
Other comprehensive income
Revaluation - - - 192,403 - - 192,403 - 192,403
Remeasurement of net defined benefit liability - - - - - (2,813) (2,813) - (2,813)
Exchange gains on translating presentational currency - - - - (403,170) - (403,170) (701) (403,871)
Total comprehensive income for the period - - - 171,167 (403,170) 132,347 (99,656) 264 (99,392)
At 30 September 2021 3,006 1,125,012 1,000 1,315,739 720,131 679,718 3,844,606 (2,619) 3,841,987
Profit for the period - - - - - 146,754 146,754 809 147,563
Transfer of surplus depreciation - - - (25,711) - 25,711 - - -
Other comprehensive income
Exchange gains on translating presentational currency - - - - (24,968) - (24,968) (3,188) (28,156)
Total comprehensive income for the period - - - (25,711) (24,968) 172,465 121,786 (2,379) 119,407
At 31 March 2022 3,006 1,125,012 1,000 1,290,028 695,163 852,183 3,966,392 (4,998) 3,961,394
ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTH PERIOD ENDED 31 MARCH 2022
Share capital Share premium Preference share capital Revaluation reserve Foreign exchange Retained earnings Total attributable to owners of the parent Non-controlling Interest Total equity
translation reserve
USD'000s USD'000s USD'000s USD'000s USD'000s USD'000s USD'000s USD'000s USD'000s
At 1 October 2020 449 185,095 100 171,271 (250,418) 80,729 187,226 (26) 187,200
Transactions with owners
Profit for the period - - - - - 2,577 2,577 (7) 2,570
Transfer of surplus depreciation - - - (1,103) - 1,103 - - -
Other comprehensive income:
Exchange losses on translating presentational currency - - - - (11,158) - (11,158) (107) (11,265)
Total comprehensive income for the period - - - (1,103) (11,158) 3,680 (8,581) (114) (8,695))
At 31 March 2021 449 185,095 100 170,168 (261,576) 84,409 178,645 (140) 178,505
Profit for the period - - - - - 5,378 5,378 47 5,425
Transfer of surplus depreciation - - - (998) - 998 - - -
Revaluation - - - 9,110 - - 9,110 - 9,110
Other comprehensive income
Remeasurement of defined benefit liability - - - - - (133) (133) (133)
Exchange gains on translating presentational currency - - - - 36,666 - 36,666 (63) 36,603
Total comprehensive income - - - 8,112 36,666 6,243 51,021 16 51,005
At 30 September 2021 449 185,095 100 178,280 (224,910) 90,652 229,666 (156) 229,510
Profit for the period - - - - - 8,463 8,463 47 8,510
Transfer of surplus depreciation - - - (1,483) - 1,483 - - -
Other comprehensive income
Exchange gains on translating presentational currency - - - - (18,384) - (18,384) (168) (18,552)
Total comprehensive income - - - (1,483) (18,384) 9,946 (9,921) (121) (10,042)
At 31 March 2022 449 185,095 100 176,797 (243,294) 100,598 219,745 (277) 219,468
ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ‑ 31 MARCH 2022
Unaudited Audited
31 Mar 2022 31 Mar 2021 30 Sept 2021
ZMW'000s ZMW'000s ZMW'000s
ASSETS
Non - current assets
Goodwill 166,801 166,801 166,801
Property, plant and equipment 3,092,010 3,419,935 3,115,018
Investment in associate 39,181 42,911 40,468
Deferred tax assets 16,305 8,680 9,050
3,314,297 3,638,327 3,331,337
Current assets
Biological assets 718,383 689,646 358,997
Inventories 972,887 906,914 1,197,846
Trade and other receivables 187,309 149,606 234,076
Assets held for disposal 167,577 175,654 170,550
Amounts due from related companies 3,484 4,949 4,202
Income tax recoverable 994 19,800 3,707
Cash and Cash equivalents 226,654 83,678 201,539
2,277,288 2,030,247 2,170,917
Total assets 5,591,585 5,668,574 5,502,254
EQUITY AND LIABILITIES
Capital and reserves
Share capital 3,006 3,006 3,006
Preference share capital 1,000 1,000 1,000
Share premium 1,125,012 1,125,012 1,125,012
Reserves 2,837,374 2,815,244 2,715,588
3,966,392 3,944,262 3,844,606
Non-controlling interest (4,998) (2,883) (2,619)
3,961,394 3,941,379 3,841,987
Non - current liabilities
Interest bearing liabilities 146,667 124,233 195,555
Leases 3,797 10,242 7,253
Deferred liability 7,845 10,578 8,891
Deferred taxation 94,229 85,041 88,056
252,538 230,094 299,755
Current liabilities
Interest bearing liabilities 239,231 359,159 210,709
Leases 6,012 16,446 12,418
Trade and other payables 483,404 400,006 464,103
Provisions 197,491 120,857 169,307
Taxation payable 28,864 23,940 13,771
Bank overdrafts 422,651 576,693 490,204
1,377,653 1,497,101 1,360,512
Total equity and liabilities 5,591,585 5,668,574 5,502,254
ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ‑ 31 MARCH 2022
Unaudited Audited
31 Mar 2022 31 Mar 2021 30 Sept 2021
USD '000s USD '000s USD '000s
ASSETS
Non - current assets
Goodwill 9,241 7,554 9,964
Property, plant and equipment 171,302 154,888 186,082
Investment in associate 2,170 1,943 2,417
Deferred tax asset 903 394 541
183,616 164,779 199,004
Current assets
Biological assets 39,800 31,234 21,445
Inventories 53,900 41,074 71,556
Trade and other receivables 10,377 6,776 13,983
Assets held for disposal 9,284 7,955 10,188
Amounts due from related companies 193 224 251
Income tax recoverable 55 897 221
Cash and Cash equivalents 12,557 3,790 12,039
126,166 91,950 129,683
Total assets 309,782 256,729 328,687
EQUITY AND LIABILITIES
Capital and reserves
Share capital 449 449 449
Preference share capital 100 100 100
Share premium 185,095 185,095 185,095
Reserves 34,101 (6,999) 44,022
219,745 178,645 229,666
Non-controlling interest (277) (140) (156)
219,468 178,505 229,510
Non - current liabilities
Interest bearing liabilities 8,126 5,626 11,682
Leases 210 464 433
Deferred liability 435 479 531
Deferred tax liability 5,220 3,852 5,260
13,991 10,421 17,906
Current liabilities
Interest bearing liabilities 13,254 16,266 12,587
Leases 333 745 742
Trade and other payables 26,780 18,116 27,723
Provisions 10,941 5,474 10,113
Taxation payable 1,599 1,084 823
Bank overdrafts 23,416 26,118 29,283
76,323 67,803 81,271
Total equity and liabilities 309,782 256,729 328,687
ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTH PERIOD ENDED 31 MARCH
2022
Audited
6 months to 6 months to Year to
31 Mar 2022 31 Mar 2021 30 Sept 2021
ZMW'000s ZMW'000s ZMW'000s
Cash inflow/(outflow) from Operating activities
Profit before taxation 181,150 54,937 203,971
Finance costs 58,413 56,360 115,282
Loss on disposal of property, plant and equipment 3,756 (1,345) 2,260
Depreciation 60,576 84,275 160,471
Share of loss of equity accounted investment 1,287 915 3,358
Profit from asset held for - 20,843 -
sale
Fair value price adjustment on biological (5,273) (17,242) (6,651)
assets
Defined benefits liability movement - - 4,473
Defined benefits paid - - (6,971)
Net unrealised foreign exchange losses/(gains) 10,513 (5,345) (19,422)
Earnings before interest, tax, depreciation and amortisation, fair value 310,422 193,398 456,771
adjustments and net unrealised foreign exchange losses
(Increase)/decrease in biological assets (354,113) (496,099) (176,041)
Decrease in inventory 224,959 196,726 (94,206)
Decrease in trade and other receivables 46,767 (16,938) (101,408)
Decrease in amounts due from related companies 718 4,388 5,135
Decrease in trade and other payables and provisions 47,485 85,868 198,415
Increase in amount due to related companies - (443) (443)
(Decrease)/increase in deferred liability (1,046) (811) -
Income tax (16,863) - (4,734)
paid
Net cash inflow/(outflow) from operating activities 258,329 (33,911) 283,489
Investing activities
Purchase of property, plant and (62,652) (59,829) (116,629)
equipment
Proceeds from sale of assets 405 2,247 51
Net cash outflow from investing activities (62,247) (57,582) (116,578)
Net cash inflow/(outflow) before financing 196,082 (91,493) 166,911
Financing
Long term loans repaid (52,436) (81,925) (262,705)
Receipt from term loans - - 220,000
Repayment of short term funding (158,471) (228,246) (477,906)
Receipt of short term funding 101,000 232,646 449,619
Leases repaid (9,862) (16,321) (32,513)
Finance costs including discontinued operations (58,413) (56,360) (115,282)
Net cash outflow from financing (178,182) (150,206) (218,787)
Increase/(decrease) in cash and cash equivalents 17,900 (241,699) (51,876)
Cash and cash equivalents at beginning of period (288,665) (236,909) (236,909)
Effects of exchange rate changes on the balance of
cash held in foreign currencies 74,768 (14,407) 120
Cash and cash equivalents at end of period (195,997) (493,015) (288,665)
Represented by:
Cash in hand and at 226,654 83,678 201,539
bank
Bank (422,651) (576,693) (490,204)
overdrafts
(195,997) (493,015) (288,665)
ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTH PERIOD ENDED 31 MARCH
2022
Unaudited Audited
6 months to 6 months to Year to
31 Mar 2022 31 Mar 2021 30 Sept 2021
USD'000s USD'000s USD'000s
Cash inflow/(outflow) from/(on) operating activities
Profit before 10,447 2,618 9,658
taxation
Finance costs 3,369 2,686 5,458
Loss on disposal of property, plant and equipment 217 (64) 107
Depreciation 3,493 4,017 7,598
Share of loss of equity accounted investment 74 44 160
Profit from discontinued - 993 -
operations
Fair value price adjustment on biological (304) (822) (315)
assets
Defined benefits liability movement - - 212
Defined benefits paid - (330)
Net unrealised foreign exchange losses/(gains) 606 (255) (920)
Earnings before interest, tax, depreciation and amortisation, fair value 17,902 9,217 21,628
adjustments and net unrealised foreign exchange losses
Increase/(decrease) in biological assets (20,422) (23,646) (8,335)
Decrease in inventory 12,973 9,377 (4,461)
Decrease in trade and other receivables 2,697 (807) (4,802)
Decrease in amounts due from related companies 41 209 243
(Decrease) in trade and other payables 2,738 4,093 9,395
Increase in amount due to related companies - (21) (21)
(Decrease) in deferred liability (60) (39) -
Income tax (972) - (224)
paid
Net cash inflow/(outflow) from operating activities 14,897 (1,617) 13,423
Investing activities
Purchase of property, plant and (3,613) (2,852) (5,522)
equipment
Proceeds from sale of assets 23 107 2
Net cash outflow from investing activities (3,590) (2,745) (5,520)
Net cash inflow/(outflow) before financing 11,307 (4,362) 7,903
Financing
Long term loans repaid (3,024) (3,820) (12,439)
Receipt from term loans - - 10,417
Repayment of short term funding (9,139) (10,773) (22,628)
Receipt of short term funding 5,825 10,952 21,289
Lease finance repaid (569) (778) (1,539)
Finance costs (3,369) (2,686) (5,458)
Net cash outflow from financing activities (10,276) (7,105) (10,358)
Increase/(decrease) in cash and cash equivalents 1,031 (11,467) (2,455)
Cash and cash equivalents at beginning of period (17,244) (11,763) (11,763)
Effects of exchange rate changes on the balance of
cash held in foreign currencies 5,354 902 (3,026)
Cash and cash equivalents at end of period (10,859) (22,328) (17,244)
Represented by:
Cash in hand and at 12,557 3,790 12,039
bank
Bank (23,416) (26,118) (29,283)
overdrafts
(10,859) (22,328) (17,244)
A copy of the Interim Report will shortly be available to view on the
Company's website at www.zambeefplc.com/aim-rule-26/
END
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