Listed-food processor, National Foods Holdings Limited posted a 15 percent increase in volumes to 525 000 tons during the year ended June 2021 as demand for its products improved across all segments, the company has said.
This was achieved in spite of the disappointing result from the Maize unit, where volumes declined by 32 percent largely on the back of intense competition from imported maize meal from South Africa and the discontinuation of the subsidy program.
“This positive outcome was driven by improved consumer demand and a steadily improving market presence across the portfolio,” said company non-executive chairman, Todd Moyo.
Revenue for the period increased to ZW$ 28.07 Billion, a 343 percent increase on the prior period on the back of the volume growth as well as the impact of inflation.
Volumes for the Flour unit increased by 43% compared to the prior year. This growth was achieved on the back of
strengthening consumer demand.
Stockfeed volumes improved by 33 percent when compared to prior year. This encouraging result was driven by the poultry category, where volumes increased by 53 percent relative to last year.
“Volumes in this Division increased significantly by 74 percent versus the comparative period. The solid growth was achieved across the category portfolio on the back of competitive pricing,” said Moyo.
The Maize unit had a disappointing year, with performance being impacted by the normalization of the market post the removal of the subsidy scheme as well as a proliferation of cheap imported maize meal, notably from South Africa.
Volumes for the Flour unit grew 43 percent while that of Snacks and Treats division increased by 57 percent.
“New products continue to be launched across the (snacks and treats) portfolio to broaden and enhance the offering,” said Moyo.
Profit before tax in inflation-adjusted terms increased by only 82 percent to ZW$ 3.42 Billion which, “was a muted performance relative to the rate of inflation and was largely caused by lower gross margins across the portfolio, the performance of the Maize unit, as well as significant increases in operating expenditure and interest,” said the company.
The Group has lined up some capital projects for the current year which includes the acquisition of additional cereal manufacturing equipment at a cost of US$ 4 million.
It will also purchase a new state of the art Flour mill, which will be installed as a replacement for the existing mill at the Bulawayo Basch Street site, at an estimated cost of US$ 5 million.
“The project is now underway and progressing on schedule with commissioning scheduled for late 2022,” said the company.