12 °c
London
Thursday, February 2, 2023
No Result
View All Result
FurtherAfrica
  • Countries
    • Angola
    • Botswana
    • Cape Verde
    • DRC
    • Eswatini
    • Ethiopia
    • Kenya
    • Malawi
    • Mauritius
    • Mozambique
    • Namibia
    • Nigeria
    • Rwanda
    • South Africa
    • Tanzania
    • Uganda
    • Zambia
    • Zimbabwe
  • Interviews
  • Understanding
  • Videos
  • Travel
  • Weekend
  • About
FurtherAfrica
  • Countries
    • Angola
    • Botswana
    • Cape Verde
    • DRC
    • Eswatini
    • Ethiopia
    • Kenya
    • Malawi
    • Mauritius
    • Mozambique
    • Namibia
    • Nigeria
    • Rwanda
    • South Africa
    • Tanzania
    • Uganda
    • Zambia
    • Zimbabwe
  • Interviews
  • Understanding
  • Videos
  • Travel
  • Weekend
  • About
No Result
View All Result
FurtherAfrica
No Result
View All Result
Home Africa

Zambia: Zambeef performance analysis 2018 financial year

FurtherAfrica by FurtherAfrica
May 21, 2019
in Africa, Agriculture, Finance, Industry and Commerce, Zambia
Reading Time: 3 mins read
835 53
0
eSwatini to ease ban on South African meat after foot and mouth outbreak
Share via QRWhatsappShare on FacebookShare on TwitterLinkedInPinteresteMail

The Zambeef Group is one of the largest integrated agri-businesses in Zambia, 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. 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 (Annual Report, 2018). The Group’s business model is vertically integrated for strong foundations for growth in secure supply chains, reduce risk and earnings volatility. In April 2018, an outbreak of Foot and Mouth Disease (FMD) was announced by the Ministry of Fisheries and Livestock which greatly impacted on Zambeef’s Kalunda Dairy by resulting in a loss of slightly over 175 cattle. By July 2018 the volume of milk produced per herd had recovered since the disease was contained and the group had received USD240,000 in insurance compensation in March 2018 for the lost cattle (Annual Report, 2018).

According the 2018 Annual Report, the Zambeef Group achieved a Profit After Tax excluding discontinued operations of ZMW24.5 million (USD2.5 million) versus ZMW4.4 million (USD0.5 million) that was reported in the previous financial year. It is significant to note that gross margins and volumes in the Group’s core divisions of Retail and Cold Chain Food Products (CCFP) and Stockfeed. In 2018, this division delivered a very satisfactory EBITDA of ZMW193.5 million (2017: ZMW132.7 million) or USD19.5 million (2017: USD13.9 million), generating an EBITDA margin of 9.7% compared to 7.0% in 2017. This performance encouraged the Group given the significant increase in overheads during the period as a result of the Government’s move to eliminate subsidies on fuel and electricity.

The Stockfeed division produced 200,846 tons of feed in 2018 compared to 155,795 tons in 2017, representing a 28.9% increase. The new Novatek stockfeed plant in Mpongwe, which opened in 2017, has reached 44.4% capacity, compared to the targeted 30%. Sadly, the overall Stockfeed division’s Gross Profit margin reduced from 25.2% (ZMW166.9 Million; USD17.5 million) to 23.2% (ZMW163.4 million:USD16.5 million) compared to the prior corresponding financial period which was largely caused by an increase in soft commodity prices in Quarter 2 of 2018. Moreover, the Cropping division Gross Profit margin increased from 26.6% to 36.8% compared to the prior period. This resulted in an increase in Gross Profit from ZMW134.6 million to ZMW189.6 million compared to (USD14.1 million to USD19.1 million). The Cropping division delivered a strong EBITDA margin increase from 3.2% to 13.7% compared to the prior period. This resulted in an overall increase in EBITDA from ZMW16.4 million to ZMW70.9 million (USD1.7 million to USD7.1 million) (Annual Report, 2018).

The Zambeef Group’s strategic investment includes;

  • 2 million was spent on the continued rollout of new modern Macro retail outlets across Zambia, with 10 new stores opened during the financial year.
  • In October 2017, Zambeef welcomed Mpongwe Farm on the Copperbelt at the cost of USD30 million hatchery and stockfeed mill which is now the largest agricultural investment in the province.
  • Zambeef completed the sale of 90% of Zambeef’s shareholding in its wholly owned subsidiary Zampalm Limited, to the state-owned Industrial Development Corporation (IDC) for a cash consideration of USD16 million on 6 April 2018, in line with the Group’s ongoing strategic focus on reducing Group debt.

Moving forward, the macro-economic climate is anticipated to be more challenging for Zambia in 2019 for Zambeef which includes high national debt levels and an increasingly volatile Kwacha exchange rate, which could impact on the growth of the Zambian economy. Despite these macro concerns, the 2019 financial year has started positively with continued steady growth in volume, margin and revenue (Annual Report, 2018). Moreover, the Group is expected to continue growing their US$ earnings and generate a positive free cash in this financial year. It is important to note that Zambeef remains committed to employing EBITDA to fund working capital, capital expenditure for financially viable projects, and to service debt and, as a result, the Group does not intend to raise further debt in the near future. In line with its stated strategic objectives, it plans to continue to reduce its debt levels in the medium term, which will help to mitigate foreign exchange and interest rate risk exposures (Annual Report, 2018).

Source: Financial Insight

Related

Tags: agri-businessesAnnual ReportcattlechickenCopperbeltdairy productsDistributionEggsFishflourFMDfoot and mouth diseaseIDCIndustrial Development CorporationKalunda DairyMilkMpongwe FarmporkprocessingProductionretailing of beefstockfeedZambiaZampalm Limitedзамбияザンビア赞比亚
ScanSendShare355Tweet222Share62Pin80Send
FurtherAfrica

FurtherAfrica

Founded in 2015 FurtherAfrica is an online platform centralising news and content focusing on the development and growth story of the African continent.

Related Posts

Trade

US multinational plans to invest in fish farming in Angola

by FurtherAfrica
February 2, 2023
Mozambique using Chinese satellites to forecast potential natural disasters
Climate

Mozambique selects insurance company against disasters

by Club of Mozambique
February 2, 2023
Agriculture

Zimbabwe and Belarus sign US$66m deal for tractors

by Farmers Review Africa
February 2, 2023
Operation of bank neutral cash hubs in Nigeria
Economy

Nigeria’s lower house approves extra US$2.2B central bank loans to government

by FurtherAfrica
February 2, 2023
Venture Capital

South African Carry1st mobile games publisher raised US$27M pre-Series B funding

by TechGist Africa
February 1, 2023
Platform Africa 2023
 
Mozambique eVisa
 
MozParks
 

Translate this page

Read the Latest

Trade

US multinational plans to invest in fish farming in Angola

by FurtherAfrica
February 2, 2023
0

US agri-food group "Dagan Ltd" plans to set up a fish farming agribusiness complex in Angola by 2024, with an...

Read more
Mozambique using Chinese satellites to forecast potential natural disasters

Mozambique selects insurance company against disasters

February 2, 2023

Zimbabwe and Belarus sign US$66m deal for tractors

February 2, 2023
Operation of bank neutral cash hubs in Nigeria

Nigeria’s lower house approves extra US$2.2B central bank loans to government

February 2, 2023

South African Carry1st mobile games publisher raised US$27M pre-Series B funding

February 1, 2023

FurtherAfrica Partners Network

The Exchange Club of Mozambique Taarifa Rwanda
TechGist Africa Africa Oil & Power Farmers Review Africa
Tanzania Invest Zambia Invest See Africa Today
Africa Global Funds Novafrica CrudeMix Africa
Harambee Africa Botswana unplugged Financial Insights Zambia
O Económico Digilogic Africa Web3Africa

Subscribe to FurtherAfrica

Enter your email address to receive new articles on your email.

Join 99,736 other subscribers.
FurtherAfrica

© 2021 FurtherMarkets

FurtherAfrica is a FurtherMarkets Limited platform

  • Countries
  • Interviews
  • Understanding
  • Videos
  • Travel
  • Weekend
  • About

Follow Us

No Result
View All Result
  • Countries
    • Angola
    • Botswana
    • Cape Verde
    • DRC
    • Eswatini
    • Ethiopia
    • Kenya
    • Malawi
    • Mauritius
    • Mozambique
    • Namibia
    • Nigeria
    • Rwanda
    • South Africa
    • Tanzania
    • Uganda
    • Zambia
    • Zimbabwe
  • Interviews
  • Understanding
  • Videos
  • Travel
  • Weekend
  • About

© 2021 FurtherMarkets

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?
 

Loading Comments...