Operating profit for agri-business Zambeef increased by 15.74% this year. The result follows on from the business’ remarkable 189% profit increase for 2015 as the company continued to see strong volume-based sales growth.
A 10.8% increase in the sales of chilled meat and dairy helped deliver record profitability for the company, which operates in some of Africa’s top economies, such as Zambia, Nigeria and Ghana.
Zambeef increased its retail network from 154 outlets to 171 this year. This encompassed the launch of a number of dedicated butchery shops, alongside more traditional macro food stores, the company said.
“Zambeef has ended the financial year in a strong position,” commented Zambeef chairman Dr Jacob Mwanza in a press statement.
“A 10.8% volume growth in cold chain food products and a 15.3% volume growth in stock feed has delivered record profits through the efficient delivery of our strategic priorities – a platform has been created from which to continue sustainable long-term growth. The balance sheet has been significantly strengthened as a result of CDC [Group] having made a substantial investment in the Group.”
UK government-owned CDC Group, which offers capital to African companies, spent $65m for a 17.5% stake in Zambeef in October 2016.
The increase in operational profitability means Zambeef is set to invest in growing the business. Opening new macro food stores and expanding chilled food production capacity to satisfy increased demand across south and eastern Africa are central to expansion plans, according to Mwanza.
“Zambeef operates in a dynamic expanding market, where the demand for its products, both locally and in neighbouring countries, is expected to grow rapidly in order to meet the needs of an increasing population.
“We are entering into a new era for Zambeef, and I am confident that the Group is well positioned to take advantage of the opportunities that lie ahead.”
Earnings before interest, taxes, depreciation, and amortisation (EBITDA), a measure of a company’s operational liquidity, increased by 111.1% in Zambian Kwacha terms. EBITDA increased from ZMW149.5m ($21.2m) in 2015 to ZMW316.6m ($29.2m), according to Zambeef.
Profit after tax for the full-year came to ZMW157.4m ($14.5m), compared to a loss of ZMW54.6m ($7.7m) in 2015. The company’s group debt also shrank by 23.6%.