London Stock Exchange-listed agribusiness Zambeef operates across Zambia, Nigeria and Ghana, and the relative stability of the Zambian Kwacha against the US dollar means it expects foreign exchange gains.
On the foreign exchange market $1 is currently worth about 9.89 Zambian kwacha.
This is likely to see the business incur full-year profits in US dollars that are “materially higher than current market expectations”, Zambeef said in a trading update on 30 September. Shares in Zambeef increased by 10.82% on the stock market today as the business announced it expected higher profits.
In the past six months Zambeef rolled out a number of retail stores across Sub-Sharan Africa and reported a 200% increase in operating profits in half-year unaudited results, posted 8 June.
On 4 August the business received an investment of $65m from CDC Foods. This injection of capital helped Zambeef settle two put options (selling assets at an agreed price) with RCL Foods and “substantially reduce” the company’s debt, Zambeef said.
“In line with the group’s strategy, it is pleasing to note that gearing has been reduced significantly following the CDC transaction, which also allowed Zambeef to settle the two RCL Foods put options,” Carl Irwin, joint chief executive of Zambeef said. “Furthermore, driving the cold chain food products through the retail network will continue to be a key focus.”
Zambeef will post its full-year audited trading results on Friday 25 November.
Zambeef claims to be the largest vertically integrated meat processor and agribusiness in Zambia. The company is also in the process of expanding rapidly across Nigeria and Ghana by opening new retail stores to increase to reach of the business. Alongside beef, pork and poultry, the business also produces milk, eggs, dairy products, fish, flour and animal feed.