The Sunday Mail
Dairibord Holdings chief executive Mr Anthony Mandiwanza at the group’s financial results presentation – Picture by Kudakwashe Hunda
MILK processor, Dairibord Holdings, says the unprecedented job losses that have seen almost 20 000 people being fired since June will have an impact on the company’s volumes in the second half of the year.
Most firms have taken advantage of the Supreme Court ruling of July 17, which allows companies to terminate employee’s contracts on notice, shed excess labour without the burden of paying to retrenchment packages.
In a statement accompanying the group’s results for the half year ended June 30 2015, Dairibord chairman Dr Leonard Tsumba said:
“The decline in economic activity is likely to continue in the second half of 2015, with consumer deflation remaining a significant risk to the earnings of the business.
“Company closures and retrenchments will negatively impact disposable incomes and aggregate demand, while food shortages will affect raw milk production and prices.”
During the period under review, Dairibord’s sales volumes increased by 25 percent to 37 498 million litres, driven by beverages which were 63 percent above the prior year due to new products launched in the second half of 2014.
Liquid milks were 1 percent up on prior year because of disruptions on Steri milk production during the Chipinge plant refurbishment.
The group also returned to profitability after recording an operating profit of US$848 000 compared to a loss of US$627 000 million posted in 2014.
The Malawi business unit also reported improved performance, posting an operating profit of US$35 000 compared to a loss of US$402 000 in the prior reporting period.
Salient features of the results
• Raw milk intake increased by 2 percent compared to the same period last year, with Dairibord Zimbabwe recording a 6 percent increase in intake while Dairibord Malawi recorded a 19 percent decline
• Sales volumes rose by 25 percent
• Revenue grew by a lower 10 percent to US$47 973 million
• An operating profit of US$0,848 was achieved compared to a loss of US$0,0627 million in 2014
• Malawi unit posted a US$35 000 profit from loss of US$402 000 recorded in 2014 due to cost reduction initiatives
• Cash generated from operations improved from US$0,262 million in 2014 to US$1,733 million
• Disposal of excess properties also saw the group raising US$0,826 million
