Zambeef Products PLC, a leading cold chain food and retail business in Zambia, Nigeria, and Ghana, has provided a trading update for the year ended 30 September 2024. The company expects revenue and gross profit to be approximately 15% below market expectations due to operational performance and currency depreciation. Profit before tax is anticipated to be around 30% lower, primarily due to higher financing costs and an impairment of an investment in an associate. The reported profit after tax is expected to be approximately 55% below current market expectations, reflecting a loss from an asset held for sale.
The company faced a challenging market and operating environment in the first half of the year, with constrained consumer spending, tight monetary policy, and constrained government spending in Zambia. Additionally, adverse effects of El Nino, including the worst drought in the region's history, impacted various sectors crucial to the nation's well-being. These challenges led to reduced crop yields and increased overhead costs due to higher input costs and sustained devaluation of the local currency.
Zambeef's strategic initiatives, including optimized pricing across all divisions, helped mitigate the impact of rising input and overhead costs. However, the company's investment in an associate, Zampalm, is expected to be impaired by approximately 50% in the interim results to 31 March 2024 and fully impaired in the full-year results to 30 September 2024.
Despite these challenges, the demand for Zambeef's products remained resilient, demonstrating positive growth compared to the previous year in Zambian Kwacha. The company expects to release its half-year results by the end of June 2024. Shareholders are advised that the information in this trading update has not been reviewed or reported on by the company's external auditors.
Zambeef Products PLC is the largest integrated cold chain food products and agribusiness company in Zambia, with operations in primary production, processing, distribution, and retailing of various food products. The company has 236 retail outlets throughout Zambia and West Africa and is one of the largest suppliers of beef, chicken, pork, milk, dairy products, fish, flour, and stockfeed in the region. The company also operates as one of the largest cereal row cropping operations in Zambia, with approximately 7,265 hectares of row crops under irrigation and a further 8,000 hectares of rainfed/dry-land crops available for planting.