Dairy producer, Dairibord Holdings Limited has not declared a final dividend for the full year 2019 trading period as the company consolidate its balance sheet against the imminent threat of a recession from the Covid-19 pandemic, 263Chat Business reports.
In November, the company paid off its shareholders an interim dividend of ZWL 5.516 million at 1.06 ZWL cents per share.
On Tuesday, the company announced a 60 percent growth in revenue for the full year ending 31 December 2019 to reach ZWL 1.115 billion driven by growth in exports and upward price adjustments.
While its financial position remained healthy, the ultimate effects of the Covid-19 on the economy and on its business over-ally remained very much uncertain, the company warned.
“The Board has taken into account the uncertainties in the local and global economies, exacerbated by Covid-19 and resolved to preserve working capital by passing the dividend for the year ended 31 December 2019,” Dairibord wrote in a statement accompanying its financial results.
The economy is set to decline by at least 9 percent due to the effects of the Covid-19, the Zimbabwe National Chamber of Commerce said last week.
This is expected to strain the local financial market and ultimately lending hence more companies are preserving funds ahead of uncertain times.
Meanwhile, Dairibord managed to consolidate its export earnings by double the margin in the comparable period prior year.
“Exports revenue grew by 100 percent from USD 1.7 million to USD 3.4 million as the company continued to drive exports in order to increase its regional footprint and to generate foreign currency to cover import requirements,” the company said.
Dairibord has been operating below capacity during lockdown and has also faced shortages of key raw materials , a development already affecting product output.