BY MISHMA CHAKANYUKA
Dairibord Holdings’ after tax profit increased more than two-fold to $6,48 million from $1,94 million in the full year ended December 31, 2018, driven by an increase in revenue.
Revenue for the period grew by 28% to $126,44 million.
Dairibord chairperson Josphat Sachikonye said the operating environment during the period under review had weakened, negatively impacting the company’s product supply and the cost of doing business.
“The operating environment deteriorated during the period under review, in particular the second half of the year which was characterised by worsening foreign currency shortages and rising inflation,” he said.
“These developments had a negative impact on product supply and the cost of doing business, leading to consumer price increase. Year-on-year inflation closed at 42,09%, while the foods and non-alcoholic beverages inflation surged to 53,68%.”
The group’s total borrowings declined to $3,7 million from $7,78 million in the previous year, while finance costs reduced to $570 million from $718 million.
Net cash generated from operations increased by 48% to $9,23 million due to improved operating performance.
Dairiboard’s raw milk intake improved by 20% compared to the national growth of 14%, showing the benefits of the group’s milk supply development strategy.
Sachikonye said liquid milk volumes grew by 9% and volumes sold from continuing operations increased by 3%, but growth was constrained, worsening foreign currency availability to buy raw and packaging materials.
The company expects the operating environment in 2019 to improve.
“The recent Monetary Policy Statement coupled with commitment by government to implement the Transitional Stabilisation Plan is expected to improve the operating environment in 2019.”
“Inflation is expected to decline, while aggregated demand is expected to slow down in the medium term,” he said.