Dairibord Holdings Limited (DHL) recorded an increase of 35% in revenue to $42,4 million from $31,3 million attributed to growth in volumes of food and liquid milk.
Total sales for the group were up 27% for the six months ended June 30 2011 from same period last year. In a statement accompanying the group’s financial results, DHL chairman Timothy Chiganze said growth volumes of liquid milk and foods increased by 40% and 42% respectively.
Beverages registered a 14% growth.
“The reduced growth in beverage volumes was a result of the late commissioning of the Cascade plant which spilled well into the second quarter of the year,” said Chiganze.
“However, I am pleased to announce that the commissioning has now been successfully completed and the benefits should be realised in the second half of the year. Beverages contribution to sales volume was 45%, liquid milk 39% while food contributed 16%.”
DHL subsidiaries include Dairibord Zimbabwe (Pvt) Ltd, Lyons, NFB Logistics (Pvt) Ltd and Dairibord Malawi (Pvt) Ltd.
The group recorded profit before tax of $3,3 million from $3,8 million same period last year indicating a 13% decline from last year.
Chiganze said exports remained depressed and contributed 1% of total sales during the period under review as the group focused on the more profitable domestic market.
“As product supply improves from the recently installed capacity, the group will re-open old markets and grow export volumes,” he said.
The group recorded an operating profit of $3,6 million up by 15% from $3,1 million same period last year while operating costs went up by 38% due to cost increases in firming international commodity prices and the strengthening of the South African rand and euro.
“These factors increased the cost of inputs like sugar, milk powders, fuel and petroleum-based packaging materials,” said Chiganze.
“The operating profit margin shed off one percentage point to 9% as a result of these cost pressures. Management has adopted and is implementing measures to control the rising input costs and defend the margins.”
The company is in discussions with an international financial institution to secure-long term funding to restructure the statement of financial position.
During the period under review the group registered a 29% increase in raw milk compared to same period last year.
In the first six month to June the country recorded a 25% growth in raw milk intake while Malawi intake increased by 41%.
The group said the raw milk production locally increased to 4,2 million litres, but it is still far from the consumer demand of over six million litres per month.