Dairibord Holdings says revenue for the first quarter (Q1) to March grew substantially to ZW$ 3,9 billion which was 129 percent above comparable period last year due to positive price and volume performance.
The group however said, the positive performance was also aided by growth in export revenue which was up by 149 percent over the same period last year while domestic US$ revenue grew by 190 percent.
Overall, foreign currency revenues grew by 182 percent.
In its Q1 trading update, the company said sales volumes for the period at 23 million litres were 17 percent above the same period in 2021, with Foods and Beverages increasing by 29 percent and 31 percent, respectively.
However, operating margins remained under pressure due to high input costs of both domestic and foreign supplies.
As a result, operating profit grew by 48 percent above the prior year.
“Global crude oil price increases had a material impact on raw and petroleum-based packaging material and transport costs. Furthermore, the cost of milk powders increased in the world markets resulting in a cost-push on milk and other dairy products. Utilities, labour and financing costs were also significant cost drivers,” said Dairibord.
Liquid Milks sales fell by 4 percent due to plant unavailability on the UHT line which was under commissioning.
The commissioning and optimisation of several capital projects, aimed at increasing product supply, was in progress during the period, particularly in the Liquid Milks and Beverages category
The business maintained the focus on foreign currency generation to improve the capacity to procure raw and packaging materials.
“Volumes sold in foreign currency grew 186% and accounted for 40% of total sales volumes up from 17% in 2021 with exports accounting for 8% (4% in 2021) and domestic forex sales accounting for 32% (13% in 2021).”
The group however said an already difficult economic environment has been worsened by the fact that the cost of borrowing is too high following the decision to increase the Bank Policy Rate from 60% to 80%.