Consumer staples concern Dairibord Holdings Limited says geopolitical tensions linked to the United States and Israel’s conflict with Iran are expected to sustain cost pressures in the near term, despite a 26% rise in revenue for the quarter ended March 31, 2026.
The Middle East conflict, which has continued since earlier this year, has disrupted global commodity and energy markets. Iran and the United States are currently engaged in peace talks aimed at easing tensions.
The fallout has also affected Zimbabwe, where fuel prices have risen above US$2 per litre, while supply chain disruptions and fertiliser costs remain elevated.
“Heightened geopolitical tensions, particularly in the Middle East, are expected to sustain cost pressures in the near term. Volatility in global oil markets has increased distribution costs and the pricing of petroleum-based packaging materials,” Dairibord said in its trading update for the first quarter ended March 31, 2026.
“In a highly price - sensitive consumer environment, the group’s ability to pass on cost increases remains constrained, posing potential margin pressures.”
Despite these headwinds, the group expects continued growth in the second quarter, supported by improved product availability following recent capacity enhancements across key brands.
Dairibord recorded strong volume growth of 26% in the first quarter, driven by double-digit gains across all core product categories.
The commissioning of the Chipinge Steri plant in December supported a 15% increase in liquid milk volumes. Investments in bottled Cascade and Pfuko Maheu also boosted beverages, which grew 29%.
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The foods segment rose 31%, driven mainly by strong demand for yoghurt. Beverages accounted for 67% of the product mix, followed by liquid milk at 24% and foods at 9%.
Export volumes declined 40% year-on-year as the group prioritised the domestic market amid rising local demand.
Quarterly revenue rose to US$39,40 million, up 26% from the prior year period.
However, operational challenges persisted, including electricity shortages that increased reliance on alternative energy sources, while some plants incurred additional costs from purchased water.
Dairibord said global supply chain disruptions also drove volatility in fuel, raw material, and packaging input costs, compounded by extended lead times for imported inputs.
The company said management remains focused on improving operational efficiencies and strengthening cash generation despite ongoing macroeconomic pressures.
