Innscor Africa Limited lost 2% or $6 268 952 in revenue during the group’s six months ended December 31, 2017, period due to the avian influenza epidemic that affected its Irvine’s subsidiary.
BY TATIRA ZWINOIRA
However, the group managed to post an increase in profit after tax of 30,24% to $23,96 million in the period under review from a 2016 comparative of $18,51 million, largely due to an improved performance from the group’s associate entities.
In a statement accompanying Innscor Africa’s financial results for the period under review, group chairman, Addington Chinake, said the 2% decline was from the $331,07 million earned in comparable period in 2016.
“The decline in revenue can be largely attributed to the effects of the avian influenza epidemic which reduced volumes at Irvine’s and the group’s stock feed operations, as well as the absence of third party products previously traded through the old National Foods depot network,” he said.
“Irvine’s recorded a drop in revenue of 13% over the comparative period resulting directly from the outbreak of avian influenza towards the latter part of the 2017 financial year.”
Chinake said available day old chick supply was directed towards the production of frozen chicken in an effort to keep retail and wholesale availability consistent, although volumes were still 7% lower than the comparative period.
The avian influenza epidemic led to day old chick sales dropping 33% from the comparative period while table eggs volumes were down 43%.
Overall profitability in Irvine’s performance in that regard dropped 29% during the period under review after including a final impairment charge of $2,04 million.
Mid last year, Irvine’s lost 15% of its chickens following a severe outbreak of avian influenza H5N8 at its Lanark Farm on the southern limits of Harare, which led to regional countries banning chicken imports from Zimbabwe.
This comes as the sub-region reportedly accesses 50% of its poultry and related products from Irvine’s.
Chinake said restocking of breeder operations had commenced and until normal levels of local production were achieved, broiler production would be complemented by the importation of hatching eggs.
The group, he said, expects day old chick availability to normalise in the last quarter of the current financial year, while table egg production should start to show a gradual improvement in availability by the end of the financial year.
He said stringent measures were put in place to avoid any future outbreaks.
Despite the decline in revenue the group managed to increase its earnings per share 2,79 cents in the period under review from a 2016 comparative of 2,32 cents showing a significant dividend for investors.
Innscor Africa’s net profit margin was 7,86% leaving the company in a good profitable position while its current ratio was 1,55 leaving them in good position to cover its current debt if it came due.