By ETimes
HARARE – Dairibord shares slipped 0,17 percent on Wednesday, notwithstanding sales growth reported by the company in its nine-month and third quarter ending 30 September 2023 which were highly skewed towards the US dollar.
The country’s largest milk processor is currently the 22nd most valuable stock on the Zimbabwe Stock Exchange with a market capitalization of $195 billion, which is about 1,38 percent of the ZSE equity market.
The stock slumped 0,17 percent to hit $546,00.
Dairibord indicated that the operating environment during the reporting period was still difficult, with little US dollar and Zimbabwean dollar liquidity.
This comes after policymakers instituted a raft of measures to stabilise the exchange rate and tame inflation.
“Due to the stability of the exchange rate, month-on-month inflation decreased, with consumer prices remaining relatively stable throughout the quarter,” the company said.
“However, there were exchange rate disparities which resulted in significant migration of customers to the informal trade, impacting competitiveness and demand in the formal trade channels.”
In the nine-month period, the company processed 22,4 million litres, 13 percent more than during the same period last year.
“This was ahead of the 10% growth in national raw milk production as reported by the Dairy Services Department of the Ministry of Lands, Agriculture, Fisheries, Water, Climate and Rural Development. The volume constituted 34% of the milk received by processors,” the company said.
For the quarter, sales volumes rose 11 percent to 25,8 million litres from 23,2 million litres previously. Liquid milks and beverages increased by 16 percent and 14 percent respectively, while foods declined by 24 percent.
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Exports were up 7 percent and accounted for 11 percent of total sales volumes in the quarter.
The nine-month total sales volumes were 10 percent higher than the corresponding period in the previous year. Of the overall volume, beverages made up 65 percent, liquid milks made up 28 percent and foods made up 7 percent.
Drinks saw a significant 15 percent increase, with liquid milks seeing growth. Food sales volumes fell by 23 percent as a result of poor demand caused by market disruptions and an inconsistent supply of high-quality ingredients.
Domestic sales revenue and exports for the quarter grew by 870 percent and 1,213 percent respectively.
Driven mostly by volume growth, total revenue in US dollars increased 27 percent to US$82,4 million over the cumulative period. For the quarter, 93 percent of the 74 percent of the sales were in US$ compared to 51 percent in the prior year.
“The growth in sales volumes and cost reduction measures coupled with the firming of the local currency in July 2023 significant foreign exchange gains, resulted in an improved operating performance,” the company said.
In the outlook, the group is targeting growth and improved margins despite a challenging operating environment through a number of initiatives, such as route to market optimisation and operational rationalisation to increase efficiencies. Also, de-bottlenecking initiatives using automation and equipment
Stock Market News:
The ZSE reversed losses to close in an upbeat in midweek trading as market capitalisation increased by $109,85 billion to $13,94 trillion.
The mainstream All Share Index appreciated by 0,86 percent to close at 173,221.35 points.
The Top 10 Index jumped 0.63% to close at 75,263.16 points.
Morgan & Co Multisector ETF added $19,5810 to $329,5810. Datvest Modified Consumer Staples ETF shed $1,0000 to $8,0000 and Old Mutual Top 10 ETF was $0,0443 lower at $34,9557. Cass Saddle Agriculture ETF and Morgan & Co Made In Zimbabwe remained flat at $7,5000 and $7,2000 respectively.
Tigere REIT added $0.1100 to close at $255.0000.