DZHL volumes drop 32% in first half

Zimbabwe Stock Exchange listed entity Dairibord Zimbabwe Holdings Limited (DZHL) found the going tough for the half year period to June 2020.

The period saw the company record a 32 percent drop in sales volumes.

The down turn was severe in the second quarter were sales volumes tumbled 46 percent compared to 19 percent in the first quarter.

In a statement accompanying the results chairman Josh Sachikonye said the impact of the COVID-19 induced restrictions took a toll on operations.

Raw milk intake for the period at 13 million litres was also 6 percent below prior year and was consistent with the decline in national milk production.

The Group remains the biggest milk processor accounting for 38 percent of national intake.

Sachikonyew said the most significant limiting factor to growth in raw milk production over the period was the high cost of stock feeds, escalating at a rate higher than inflation.

“To mitigate the erosion of producer viability, Dairibord continued to make frequent producer price adjustments,” he said.

Breaking down the performance, Liquid Milks, Foods and Beverages volumes dropped by 19 percent, 39 percent and 41 percent respectively compared to same period last year.

Revenue for the period was $1.2 billion, 15 percent below 2019, however in historical terms revenue grew by 537 percent.

Exports over the period accounted for 8 percent of the sales volume up from 5 percent in the same period last year despite logistics constraints in accessing regional markets due to COVID-19 restrictions.

Despite the operational inefficiencies caused by the diseconomies of scale, the Group continued to focus on cost control, as a result total operating costs declined 16 percent from prior period.

The business achieved an operating profit of $107 million compared to $43 million for the same period in 2019.

The loss for the year at $0.48 million was due to the monetary loss of $135 million.–ebusinessweekly