BY TATIRA ZWINOIRA
INNSCOR Africa Limited says it has aggressively reviewed its business models across its huge and diversified portfolio to ride out threats posed by the COVID-19 pandemic and transition from the hyper-inflationary environment.
Company secretary Andrew Lorimer said in a shareholder update on Friday that the Zimbabwe Stock Exchange-listed blue-chip had responded positively to growth strategies, delivering “pleasing volume growth” during the third quarter ended March 31, 2021.
However, Lorimer said while storms were fizzling out, “inherent complexities” were continuing to plague the economy.
He spoke as annual inflation slowed down to 194% in April from 240% in March, with the Reserve Bank of Zimbabwe forecasting a marked slowdown to 55% by July.
The group suffered hard knocks as some of its units were affected by COVID-19-induced lockdowns last year, as government made efforts to limit contagion.
Innscor has interests in several consumer-related businesses, some of which were not classified as essential services.
“While the prospects of the local agricultural season appear very positive and the prevailing economic stability proving conducive for business, inherent complexities remain,” Lorimer said.
“Ongoing COVID-19-related costs and inefficiencies continue to periodically affect global supply chains, while the real cost-push effects of transitioning out of a hyper-inflationary environment have required continual evaluation and adjustment of the group’s business models. Volume growth, balanced with competitive pricing, operating cost control, and working capital management remain key focus areas for our management teams in a highly dynamic operating environment. At present, the financial status of the group remains healthy, and the impact of the COVID-19 has not created any issues from a solvency or liquidity perspective,” he said.
Innscor reported strong volume recoveries after investing into capacity expansion and enhancement initiatives.
Lorimer said the bakery division’s volumes rose by 28%, underpinned by stable flour supplies while National Foods’ cumulative nine-month aggregate volume growth remained steady at 14% over the comparative period after improved consumer demand.
“Volumes at Colcom continued to recover into the third quarter and from a nine-month cumulative perspective were 19% ahead of the comparative period. Irvine’s continued to register solid volume performance through to the third quarter, with all three main product categories recording positive growth. Volumes within the Associated Meat Packers operation were at similar levels to those recorded in the comparative nine-month period. The volume performance was mostly impacted by lockdown trading restrictions which affected the operation’s retail chain during certain parts of the period under review,” he added.
Natpak volumes rose by 21% with Prodairy volumes surging by 42%. Probottlers’ volumes increased by 39% during the period.
He said Profeeds and Probrands saw volumes rising by 22% and 37% respectively.
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