What Innscor trading update says about the Zimbabwean economy

One of Innscor branches — Chicken Inn.

If there is one company, whose results can give us a look at how corporate Zimbabwe, and thus the economy we all live in is faring, then it has to be Innscor Africa Limited.

With business interests in almost anything that Zimbabweans consume, Innscor’s numbers can go a long way in mirroring the state of the economy and the consumer purchasing power.

Just like other recent economic indicators, for instance, the slowing inflation rate, Innscor’s trading update for the nine months to March is better than expected. Consumer sentiment continued to improve and the Group delivered pleasing volume growth over the comparative period, Company Secretary Andrew Lorimer said in a statement.

“Volume recoveries across the protein, mill-bake, packaging and beverage value chains continued to be realised,” and in a show of confidence, the Group has an “ongoing investments into capacity expansion and enhancement initiatives”.

Bread of life

The Bakery division achieved a 28 percent volume increase in the cumulative nine-month period versus the comparative period, whilst volumes achieved in the third quarter were ahead of both the previous (quarter two) and comparative quarters.

This was underpinned by a stable flour supply. A number of operational and investment initiatives are underway in the business to further enhance capacity and operational efficiencies, according to the update.

Pork, chicken and beef

Volumes at Colcom continued to recover into the third quarter, and from a nine-month cumulative perspective were 19 percent ahead of the comparative period.

Strong performances were recorded in both the fresh and processed categories and there are plans for further investments into the pig herd in the form of additional grower facilities and enhanced genetics continue to yield positive results for the operation.

Irvine’s continued to register solid volume performance through to the third quarter, with all three main product categories made up of table eggs, day old chick and frozen poetry recording positive growth.

“Capacity expansion initiatives are underway across all core categories of the business.”

However, no volume growth was recorded at Associated Meat Packers.

“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.”

Management is however not disheartened and the business continued with the roll-out of its popular “Texas Meats” retail outlets with three sites being opened in the greater Harare area during the third quarter.

Non-alcoholic beverages

Volume growth was very strong at Prodairy, surging by 42 percent over the comparative nine month period, with all core categories contributing to the operation’s performance.

The business continues to add new flavour variants within the dairy blend and mahewu categories.

At Probottlers, aggregate nine-month volumes increased by 39 percent over the comparative period; both the CSD and Cordial categories displayed solid volume improvements backed by recent investments into increased capacity.  

Profeeds and Probrands

At Profeeds, volume growth was underpinned by a continued recovery within the poultry sector, with stockfeed volumes increasing by 22 percent against the comparative nine-month period.

Probrands recorded strong volume growth in the nine-month period under review of 37 percent against the comparative period, with all core product categories contributing positively to this result.

Our national food

At National Foods, excluding the maize division, volume growth of 47 percent against the comparative period was strong in the nine-month period.

This business is made up of the flour division, poultry stock-feed division, groceries division, snack and treats division and the maize divisions.

The maize division, however, had a particularly challenging year, mainly attributable to the substantial volume of maize meal imports affecting the local market, particularly in the southern region of the country.

Volumes have also been affected by the resultant market adjustments following the removal of the subsidy program.

As a result, volumes for the nine-month period within the division were 31 percent behind the comparative period. – Business Weekly

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