Dairibord Holdings revenue fell 15 percent in inflationary terms during the first six months of the year from comparable period last year due to the local currency depreciation coupled with Covid-19 disruptions.
Inflation hovered around 730 percent yet the company’s sales during the first quarter were not consistent with hyper-inflationary developments.
The Zimbabwe dollar was for much of the half year in devaluation mode until the recent introduction of the foreign currency auction system mid-June somewhat stabilized it.
Revenue for the period was ZWL$ 1.2 billion, 15 percent below 2019 levels while sales volumes for the period at 27.3 million litres, were 32% below prior year.
The Group said despite being accorded essential services status at the start of the Covid-19 lockdown, “supply chains, market access and buying power were negatively impacted particularly in the months of April and May,”
Raw milk intake for the period was 13 million litres, 6 percent below prior year and was consistent with the decline in national milk production.
The Group remains the biggest milk processor accounting for 38 percent of national intake.
However the company sought to push its exports to hedge against depleting local purchasing power from a beleaguered economy.
“The focus on generation of foreign currency revenues continued. Exports over the period accounted for 8% of the sales volume up from 5% in the same period last year despite logistics constraints in accessing regional markets due to COVID-19 restrictions,” said the company.
Despite the operational inefficiencies caused by the diseconomies of scale, the Group continued to focus on cost control, as a result total operating costs declined 16 percent from prior period.
This in turn manifested in an operating profit of ZWL$ 107 million compared to ZWL$ 43 million for the same period in 2019.
The company declared an interim dividend of ZWL0.02 per share for the period.