Dairiboard Zimbabwe Holdings Limited (DZHL), the country’s biggest producer of milk and dairy products has hailed government’s new policy initiatives including Statutory Instrument 122 of 2017 for boosting their operations which they said helped in turning around their performance from a US$3.8 million loss in 2016 to an operating profit of US$4.058 million in 2017.
Addressing shareholders in the capital today (Wednesday), the group Chairman, Leonard Tshumba said the government thrust to instill confidence through security of tenure on farms, is expected to spur their raw milk growth and production in general.
“The operating environment was characterized by pronounced foreign currency shortages which affected product supply, and constrained the business’ ability to fully exploit volume growth opportunities. The all items Year- on -Year inflation closed the year at 3.46%, with the foods and non- alcoholic beverages inflation at 6.60%.
“Despite the challenges, demand was firm, benefiting from Government efforts to promote local manufacturing through various measures including SI122 of 2017. Going forward, the operating environment is expected to improve on the back of new policy initiatives by the government.
“In particular, Government thrust, to instill confidence through security of tenure on farms, is expected to spur raw milk growth and agriculture production in general,” he said.
According to Tshumba, the Group recorded an operating profit of $4.058 million, a turnaround from an operating loss of $3.898 million in 2016.
“Group recorded an operating profit of $4.058 million, a turnaround from an operating loss of $3.898 million in 2016. EBITDA also improved significantly from $1.257 million in 2016, to $9.522 million in 2017.
“After accounting for once off retrenchment costs of $0.847 million and a net interest bill of $0.740 million, the Group recorded a profit before tax of $2.471 million, compared to a 2016 loss before tax of $4.881 million,” he said.
Tshumba added that revenue increased 10%, to $103.147 million, on account of the 8% volume growth and a 2% nominal price adjustment effected to mitigate cost increases and the average selling price per litre, for 2017, was 3 cents higher than the $1.15 in 2016.
