ZIMBABWE Stock Exchange-listed manufacturing concern Dairibord Zimbabwe Holdings (DZL) posted a $3,3 million loss in the six months to June compared with a $2 million profit during the comparative period last year, weighed down by rising operating costs related to the group’s rationalisation exercise.
Report by Business Reporter
After issuing profit warning recently, DZL reported that the ongoing rationalisation exercise and staff costs had affected the company’s profitability.
DZL chairman Leonard Tsumba said the rationalisation’s aim was to consolidate operations and reduce overheads costs.
“These expenses relate to retrenchment packages, relocation of plant and equipment and impairment of equipment, spares, materials and receivables. The total of these expenses was $4,3 million,” Tsumba said.
During the period under review, DZL redeployed plant and equipment from Bulawayo and Mutare to Harare and Chitungwiza although the affected centres will retain their sales and distribution operations.
The group’s capital investments were $2,3 million and were mainly into cold chain facilities, distribution vehicles and commissioning of the salad cream and tomato sauce processing and filling lines.
Revenue for the group increased by 1% to $49,1 million although the sales volume decreased by 0,6% to 32,02 million litres. Raw milk intake went up to 13,3 million indicating a 2% increase.
“Liquid milks benefited from increased raw milk intake in Malawi, and importation of processed UHT milk from South Africa. Foods continue to benefit from investments made in yoghurt, tomato sauce, salad cream and ice cream. Increased capacity and brand building will continue to enhance competitiveness,” said Tsumba.
Borrowings for the group increased by $0,9 million to $7,9 million.
Dairibord Malawi contributed $200 000 to operating profit and efforts to sustain the business would continue.