Dairibord Holdings intends to grow high-quality raw milk production by supporting farmers in critical areas, including feed formulation and nutrition through its Milk Supply Development Unit (MSDU).
Chairman Josphat Sachikonye, in a statement accompanying the group’s financial results for the year ended December 31, 2022, said the Dairibord would continue to provide farmers with veterinary support, herd growth projects, input procurement facilities as well as sustainability and alternative energy options.
The group has been capacitating dairy farmers through the MSDU to increase the herd and boost productivity at the farm level.
According to Mr Sachikonye, raw milk utilised for the year stood at 28,5 million litres, 4 percent above 2021, representing 34 percent of the total intake by processors.
He said volume growth in 2023 would be underpinned by recently completed capital investment projects, which include a third Maheu (Pfuko) line, a drinking yogurt (Yoggie) line and a third blow moulder for Steri milk bottles.
“In addition, a new chilled water plant was installed at the Harare Rekayi Tangwena factory to optimize production capabilities,” said Mr Sachikonye.
He added that the group would continue to seek value-adding opportunities and would leverage initiatives in raw milk production growth.
During the year under review, sales volumes grew 3 percent ahead of the same period last year, with Beverages and Foods categories delivering growth of 7 percent and 10 percent respectively and Liquid Milks declining by 7 percent.
“Contribution to total volume for Liquid Milks, Beverages and Foods was 28 percent, 62 percent and 10 percent respectively,” he said.
During the year under review, domestic market sales volumes sold in US$ were 50 percent compared to 17 percent in 2021 and exports were 6 percent compared to 5 percent in the prior year as the group’s regional footprint continues to grow.
The group recorded inflation-adjusted revenue of $63,38 billion during the financial year under review, a 40 percent increase on the comparative period.
“Moderate volume growth and price adjustments to protect margins were the main drivers of revenue growth,” said Mr Sachikonye.
In terms of profitability, he said the business experienced increased costs arising from imported inflation and pricing distortions from currency instability.
Resultantly, cost of sales and overheads grew by 46 percent and 48,5 percent respectively. The group operating profit grew 154 percent to $6,03 billion compared to $2,37 billion reported last year.
Mr Sachikonye said the operating profit margin for the period was 10 percent up from 5,24 percent in the prior period.
At $1,69 billion, net finance charges for the period were higher than last year in both inflation and historical terms, driven by an increase in borrowings and higher interest rates during the second half of the year.
Borrowings amounting to 1,8 billion were invested in capital expenditure projects to increase production output and to fund long working capital cycles. – Herald
