Dairibord records impressive results as milk intake grows

15 May, 2024 - 17:05 0 Views
Dairibord records impressive results as milk intake grows Dairibord Zimbabwe

The Sunday News

Judith Phiri, Business Reporter

LISTED milk products processor, Dairibord Holdings Limited recorded impressive results as milk intake grew by a laudable 38 percent to 9.46 million litres up from the 6.86 million litres in the prior year’s comparative quarter.

In a trading update for the period ended 31 March 2024, Dairibord Holdings acting company secretary, Mr Maurice Karimupfumbi said the milk intake growth was ahead of the national growth in milk intake.

“The business has been aggressively pursuing raw milk growth initiatives which have started to yield impressive results as milk intake grew by a laudable 38 percent to 9.46 million litres up from the 6.86 million litres in the prior year comparative quarter.

“This was ahead of the 21 percent national growth in milk intake by processors for the same period, as Dairibord continues to be the processor with the largest raw milk intake and widest milk intake base in the country. The Group’s commitment to its suppliers and former support initiatives will ensure a sustainable milk supply for long-term growth,” he said.

He said overall sales volumes increased by 2 percent anchored by the milks and foods categories, while liquid milks volumes grew by 14 percent in the quarter compared to prior year, aided by an increase in raw milk intake.

Mr Karimupfumbi the foods category recorded a 7 percent growth from the prior year comparative quarter, however, the beverages category recorded a 3 percent decline.

He added: “The proportion of volumes sold in United States Dollars (USD) increased to 85 percent, up from the 58 percent recorded in the same period last year. This was buoyed by a commendable 97 percent increase in export volumes. In contrast, domestic volumes declined by a marginal 3 percent. Exports accounted for 9 percent of total sales volume, up from 4 percent in the prior period quarter.”

Mr Karimupfumbi said despite the operational headwinds in the environment, particularly the adverse impact of the sugar surtax on cost and pricing models, the business still showed resilience by posting growth in sales volume.

In terms of revenue for the quarter, he said it was 1 percent below comparative quarter last year due to a lower price per litre.

Mr Karimupfumbi said owing to successful cost containment efforts, operating costs decreased by 16 percent which spawned an improvement in the operating profit margins of the business at 10 percent compared to 6 percent in the same period last year.

In the outlook, he said: “While the Group expects difficulties in availability of reliable and affordable quality water and electricity to continue, the negative impact of water woes on operations have been mitigated by water reservoirs commissioned at the factory sites.”

Mr Karimupfumbi said despite the upcoming quarter being characterised by the customary low weather-induced demand, the group was geared to exploit opportunities presented by recently completed and ongoing capital investment projects aimed at optimising efficiencies and boosting capacity.

He said aggressive cost containment and reduction initiatives will continue and further improve profitability, while poor rainfall due to the El Nino phenomenon poses a big threat to the region, the country and the business.

Mr Karimupfumbi said: “Headwinds persist in the global operating environment as slow economic growth is anticipated worldwide, a result of various challenges including geopolitical tensions and ongoing supply chain disruptions.”

 

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