HomeNewsNational Foods records profit

National Foods records profit

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National Foods recorded a profit after tax of $3,6 million for the half-year ended December 2011 representing a 26% growth from the previous year.

The balance sheet grew by 7% to $46,6 million and working capital increased as a result of mounting cash requirements to fund sales during the peak December trading period.

The net debt position ended at $2,9 million representing a debt to equity ratio of 6,3% for the group.

Capacity utilisation increased to 40% leading to the cost per unit of manufactured products dropping by 14% compared to the previous year.

Group chairman Todd Moyo in his report accompanying the financial statements, said National Foods had redirected savings into more competitive pricing and re-investment in major maintenance projects.

Moyo said the macroeconomic and sociopolitical environment had remained favourable for normal trading.

The reinstatement of import duties aimed at protecting the local industry had afforded business time to enhance its competitiveness within the region.

Widening of individual tax bands had contributed to an improvement in household disposable incomes.

He said the group had continued to invest in its core manufacturing platform in order to enhance both efficiencies and capacity for future growth.
It invested $1,9 million on capital expenditure and spent $1,1 million on repairs and maintenance.

Moyo called for government policy to continue to support the local primary agriculture sector as well as secondary agro-processing industry for the country’s macroeconomic recovery.

“In this regard, the group commends the government’s policy to reinstate tariff measures that were instituted to afford the local agro-processing industry an opportunity to retool its manufacturing base and improve its competitiveness against under-priced imports,” he said.

He said the group planned to continue to grow volumes through increased penetration and consumption.

The increases in some costs at above current inflation figures, particularly utility costs, remained a concern for the group, as it tried to provide products at affordable and competitive prices.

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