Zambeef bemoans rising inflation

 Zambeef bemoans rising inflation

Zambeef bemoans rising inflation.

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LUSAKA Exchange listed, Zambeef an integrated cold chain foods and retail company with tentacles in Nigeria and Ghana bemoans rising  inflation which is putting pressure on consumer spending in that country.

This comes after Zambian inflation hastened to an 18-year high in May to 23,2% pushed by the cost of meat and fish prices.

On the other hand Nigeria’s annual inflation climbed to a more than four-year high in March, rising to 18,17%.

“Notwithstanding, the half year period continued to present challenges in the operating environment, resulting from the Covid-19 pandemic and the previous 2020 economic uncertainties, despite greater stability compared to the second half of the 2020 financial year. The rising inflation put pressure on consumer disposable incomes and reduced the share of wallet going towards food spend. Supply constraints on some of Zambeef’s product lines further put pressure on cost of inputs,” Zambeef said in a market update.

Zambeef is the fully integrated cold chain foods and retail business with operations in Zambia, Nigeria and Ghana.

Despite the inflationary pressures the company in a trading update said demand for poultry products remains strong and in line with revenue expectations.

The company said good rains and improved power supply has led to improved earnings.

 “Despite the challenges, demand for products, particular poultry products, remained strong allowing the Company to remain in line with revenue expectations. The increase in earnings is predominantly due to the strong start that the Company had the financial year, delivering results of pre-pandemic levels. The cost containment embarked on by management also continues to yield significant savings and contributed positively to the earnings. Improvements in the load shedding situation, following the good regional rains, resulted in reduced generator fuel expenditure and improved production efficiencies,”

The Group announced that for the year ending 30 September 2021, revenue (reported in USD) is expected to be in line with current market expectations, and EBITDA, EBIT and adjusted Profit Before Tax  are now expected to end 20% – 30% ahead of current market expectations (all reported in USD).

“In accordance with the Lusaka Securities Exchange (“LuSE”) Listings Requirements, the Board of Directors of Zambeef Products plc hereby advises the Shareholders of the Group that the Earnings per Share (EPS) for the half-year period ended 31 March 2021 is expected to be 3290% higher in Kwacha (2167% higher in USD) than that for the half year period ended 31 March 2020,” Zambeef said.

Chris Louw

https://sashares.co.za/

Featured Financial Writer for SA Shares - Read more about Chris's Bio -

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