National Foods HY profit declines to $8,7mln on poor maize business

National Foods HY profit declines to $8,7mln on poor maize business

HARARE, March 5 (The Source) – National Foods Holdings has recorded a 4.7 percent decline in profit before tax to $8,78 million for the six months to December compared to last year due to the poor performance of its maize business.

“The outcome was influenced primarily by the poor performance of the Maize business, where volumes declined 28 percent versus prior period as a result of a significantly improved 2013/14 local maize harvest, particularly in the Matabeleland and Masvingo Provinces,” the group said in a statement accompanying the results on Thursday.

However, the group registered a 10.9 percent growth in revenue to $167 million during the period under review excluding the Maize division while the Stockfeeds division recorded a 5.5 percent decline in volumes.

During the period under review, the group battled with cheap imports in the wake of declining consumer disposable income and deflationary pressures.

Zimbabwe’s annual inflation slid to -1.28 percent in January from the December 2014 rate of -0.80 percent while the month-on-month rate shed 0.25 percentage to -0.34 percent.

Costs declined by two percent compared to last year as efficiency improvement and cost containment measures began to bear fruit.

“As is the norm in the first half of the financial year, the group consumed $5,9 million of free cash and this was primarily directed to seasonal holdings of maize, wheat and stockfeeds raw material,” read the statement.

The group supported the 2014 wheat scheme which just completed to the tune of $3 million funding 3,300 hectares of wheat from which 21,000 was purchased.

A similar scheme is underway where 5,000 ha of maize and soya beans are being grown.

The flour milling division volumes increased by 15.5 percent compared to prior period driven by bakers flour channel, while in the pre-pack flour segment Gloria and Red Seal continued to perform strongly on shelf.

The $4,1 million refurbishment of both the Harare and Bulawayo flour mills will be completed during this financial year.

The group declared a dividend of 3.11 cents per share payable by April 2.