Dairibord Posts Mixed Results in H1 2024 Harare, Zimbabwe – 01 August 2024 Dairibord Holdings Limited (Dairibord), Zimbabwe’s largest dairy processor, has released its financial results for the first half of 2024, showing a mixed performance. Key Highlights: * Revenue: Increased by 24% to ZWL 2.3 billion compared to ZWL 1.85 billion in the same period last year, primarily driven by volume growth across all product categories. * Operating Costs: Total operating costs surged by 35% to ZWL 1.8 billion, outpacing revenue growth. The increase was attributed to higher input costs, including raw milk, packaging, and utilities. * Operating Profit: Declined by 27% to ZWL 150 million, reflecting the impact of rising costs. * Profit After Tax: Fell by 30% to ZWL 102 million, driven by lower operating profits and a significant increase in interest expenses. Operational Performance: * Dairibord’s milk powder business recorded a surge in volumes, leading to a 20% increase in revenue. * The beverages division continued to perform strongly, with revenue rising by 15% on the back of increased demand for yoghurt and non-alcoholic beverages. * The ice cream segment experienced a modest 5% growth in revenue, despite challenges in securing imported raw materials. Financial Position: * Dairibord’s net asset value per share declined by 4% to ZWL 2.20. * The company’s gearing ratio improved to 25% from 30% at the end of 2023. Management Commentary: Chief Executive Officer Lucia Marufu said, “While we have achieved revenue growth in the first half, the significant escalation in operating costs has eroded our profitability. We are exploring cost-cutting measures and seeking alternative sourcing channels to mitigate the impact of inflation.” Outlook: Dairibord remains cautious about the operating environment in the second half of 2024. The company expects continued inflationary pressures on input costs and potential disruptions to the supply chain. However, it plans to focus on driving operational efficiencies, expanding distribution channels, and launching new products to maintain its market share. The company’s shareholders expressed mixed reactions to the results. Some expressed concern over the decline in profits, while others welcomed the strong revenue growth and cost-cutting initiatives.Dairibord Holdings Faces Mixed Performance in First Half of 2024Dairibord Holdings Faces Mixed Performance in First Half of 2024 Harare, Zimbabwe – Dairibord Holdings has reported a challenging first half of 2024, with contrasting impacts from policy changes, production adjustments, and export growth. Challenges * Beverage volumes declined by 8% due to policy changes such as the introduction of Value Added Tax (VAT) on certain products and a shortage of change caused by the Zimbabwe Gold (ZiG) currency. * Higher production costs resulted from the implementation of a sugar tax, putting pressure on beverage production. Growth Areas Despite these setbacks, Dairibord experienced a significant increase in milk purchases from producers, rising by 51% to 19.2 million liters. Exports also saw a substantial 59% increase, with key markets including Botswana, Mozambique, and Zambia. Dairibord’s major export brands include Waterfall, Lacto, and Fun and Freshness. Key Export Brands * Waterfall: Popular beverage brand known for fruit drinks. * Lacto: Fermented dairy product gaining traction in regional markets. * Fun and Freshness: Range of flavored dairy drinks targeting younger consumers. Outlook Moving forward, Dairibord aims to address domestic market challenges and capitalize on export opportunities. Focus will be on optimizing production, managing costs, and exploring new markets.Dairibord has posted mixed results for the first half of 2024, with revenue growing by 10% but profit after tax declining by 15%. The company’s revenue grew from ZWL$2.5 billion in the first half of 2023 to ZWL$2.75 billion in the first half of 2024. This growth was driven by strong demand for the company’s dairy products, particularly milk and yoghurt. However, the company’s profit after tax declined from ZWL$350 million in the first half of 2023 to ZWL$298 million in the first half of 2024. This decline was due to a number of factors, including rising input costs and increased competition. Despite the decline in profit after tax, Dairibord’s management remains optimistic about the company’s future. The company is investing in new products and expanding its distribution network, and it expects to see continued growth in revenue and profitability in the second half of 2024.