HomeBusinessInnscor after-tax profit declines

Innscor after-tax profit declines

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INNSCOR Africa Limited has posted a dip in profit after tax to $24 million during the six months ended December 2014 compared to $64 million in the comparable period in 2013 attributed to a decline in volumes for some of the group’s units emanating from low disposable income.

BY VICTORIA MTOMBA

The group’s units include National Foods, Colcom, Irvine’s, Bakeries, Capri and Natpak.

In a statement this week accompanying the group’s financial results, board chairman Addington Chinake said in the six months to December the group experienced a deteriorating trading environment and reduction in disposable incomes.

Revenue for the group went down to $513 million from $525million and the operating profit was $46,1 million from $45,9 million.

Chinake said tonnage at National Foods stood at 259 000metric tonnes and the change in sales mix due to reduced maize meal sales had a negative impact on margins and consequently operating profit which was slightly behind that recorded in the comparative prior period.

“With respect to the other divisions, stock feeds showed a slight reduction in profitability, but there were improved performances from both the flour and FMCG units,” he said.

He said Colcom volumes declined by 6% over the same period in 2013 while operating profit increased by 22% over the comparative period.

Chinake said the unit had improved sales mix and rationalised product range gave rise to improved margins.

“The investment into an auxiliary pig production unit is on course and the additional pig supply from this facility is expected to come on in July 2015 and will increase internal pig producing capacity by approximately 28% per annum,” he said.

Irvine’s frozen chicken and day old chick volumes grew 20% and 9% respectively while table egg volumes declined by 7% against the comparative period.

The Irvines unit recorded reduced margins that arose from lower average selling prices and changes in sales mix this resulted in operating profit being 6% behind those achieved in the comparative period.

“Investment continues into increased hatching egg breeding facilities with the aim of being self-sufficient in hatching eggs early in the new financial year. Progress with the new feed mill continues, with commissioning due to start in the final quarter of the current financial year,” he said.

Volumes at the group’s bakery operations declined by 2% compared to the same period last year.

Fast foods operations for the group were 2% below last year’s performance.

“In our optimisation efforts, seven underperforming counters were closed in Harare during the period while the Emerald Hill complex was closed for refurbishment and is due to re-open shortly,” Chinake said.

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