Dairibord Holdings Limited (DHL) posted a $10,8 million operating profit helped by the solid performance of new products Froot Scoop and Nutriplus for the full year ended December 2011.
The company also declared a 0,44 cents per share dividend.
Total revenues were up 28% to $95,983 million from $74,981 the previous year. Profit after tax was up 14% to $7,187 million.
Earnings per share increased to 1,97 cents in 2011 compared to 1,76 cents in 2010.
Beverages contributed 32% towards revenue, foods 31%, liquid milk products 36% and the logistics business 1%.
DHL group chief executive officer Antony Mandiwanza told an analysts’ briefing in Harare on Wednesday strong brands, capital investment and business partner relationships carried the day for the group.
“Performance in 2011 was driven by the following strong brands across all our product portfolios, product mix managed in favour of high-value lines and product launches — Nutriplus, Froot Scoop,” Mandiwanza said.
But he said erratic supply and high cost of utilities, especially water and electricity, remained a challenge. “High cost of utilities is a challenge. We have gone without water for 14 days alone this month (February) and this disrupted production,” he said.
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During the year under review, DHL secured a $4 million line of credit from the PTA Bank, part of which was used to restructure the balance sheet.
Mandiwanza noted the growing competition from imports, but said this was a welcome development as it ensured the company attended to key operational issues like increasing supply and investing in plant and equipment.
He, however, expressed concern at the inconsistencies in government policy pronouncements, in particular with regards to import duty and the return of the Zimbabwe dollar.
Turning to Malawi, Mandiwanza said operations in that country were characterised by foreign currency and fuel shortages, strikes, low donor support, high interest rates of 17,75% and the 40% retention on exports proceeds.
DHL increased its shareholding in Dairibord Malawi Limited by 8,4% to 68,4% and was currently in pursuit of a shareholder restructuring exercise. “The group made a decision to dispose of Mulanje Peak Foods (a 100% subsidiary of Dairibord Malawi Limited) due to difficulty in realising real growth and profitability,” Mandiwanza said.
DHL associate ME Charhons posted a loss of $512 362 and the group has made a decision to exit the company.
Capital expenditure for the year amounted to $6,281 million and was used towards the Cascade plant, Nutriplus plant, UHT packaging line, Yoghurt plant, distribution trucks and upgrading of the management information system.
This year, DHL plans to spend $10 million on capital expenditure targeted at increasing production capacity for value-added products, enhancing distribution capacity and efficiencies, support product distribution and milk supply development.
