Zambeef Products expects earnings growth despite difficult environment

(Alliance News) - Zambeef Products PLC on Friday said it expects to report earnings growth of nearly 50% during its most recent financial year, despite "difficult operating circumstances".

Zambeef is a fully integrated cold chain food products and retail business with operations in Zambia, Nigeria, and Ghana.

The company said it expects total basic earnings per share for its financial year that ended September 30 to be 49% higher year-on-year.

It expects revenue, statutory pretax profit and adjusted earnings before interest, tax, depreciation and amortisation to be in line with current market expectations.

The group also expects adjusted pretax profit to outperform current market guidance as a result of reduced tax impact from its restructuring works last year.

Zambeef did not outline what it believed market expectations to be.

Zambeef Products said: "The macroeconomic conditions leading up to September 2024 were characterised by difficult operating circumstances, including, as previously announced, a severe drought and reduced consumer spending, compounded by the Central Bank's tightening monetary policy to address inflationary risks and constrained government spending. These factors significantly limited kwacha liquidity in the economy, leading to lower-than-expected demand for our products.

"The outbreak of Anthrax restricted cattle movement and negatively impacted public perception, slowing beef volumes in the first quarter. However, we saw a recovery in beef volumes, as bans on animal movement were lifted, from the second to the fourth quarter due to improved availability.

"Furthermore, diminished water levels impacted Zambia's hydropower generation which accounts for 85% of the country's electricity. The government initiated an aggressive countrywide load management program that necessitated the use of more expensive alternative energy sources.

"Despite these challenges, the business remained focused on its primary strategy of revenue enhancement, cost optimisation, and volume growth."

Zambeef is due to release its full-year results in early December.

Shares in Zambeef Products closed 5.9% lower at 4.00 pence each in London on Friday.

By Emily Parsons, Alliance News reporter

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