National Foods revenue down

HARARE - National Foods Holdings Limited (NatFoods) says its revenue for the quarter to September 2015 slumped three percent to $78,3 million due to unstable market pressures.

The company’s chief executive Michael Lashbrook told shareholders at the group’s annual general meeting yesterday that sales volumes for the quarter improved slightly from the same period last year.

“In respect of the trading update our volumes were 131 000 tonnes in the quarter to September which was an improvement on the prior period. The reasons for the reduction in revenue are twofold, first, a reduction in flour pricing and secondly, an issue with our maize unit,” he said.

Lashbrook said the grains company was on course with its planned capital expenditure for the year, earmarked at $9 million, with $2,3 million having already been spent on backup generators.

The NatFoods boss also said that while the group had several growth opportunities in the pipeline, it awaited regulatory approvals to announce them.

According to Lashbrook, NatFoods planted 4 200 hectares (ha) of wheat in the last winter wheat season under its contract farming scheme leading to the realisation of 35 000 tonnes of wheat from the initiative.

“We also had 3 000 ha of maize done in our contract farming venture and are currently sitting on three months cover of maize,” he said.

This comes as the Innscor subsidiary posted a 20 percent decline in profit before tax at $17,3 million for the year to June, on the back of poor performance by the group’s maize division.

In a statement accompanying the group’s financials for the period, group chairman Todd Moyo said the results were heavily influenced by the poor performance of the maize division, where volumes declined 39,3 percent.

“Excluding the maize division, revenue for the year grew 5,4 percent, being driven in the main by a strong performance from the flour division…

“The maize division recorded reduced volumes following the good harvest which resulted in increased household retentions of raw maize. Whilst volumes achieved were disappointing they were largely in line with similar size harvests in previous years,” he said.

The NatFoods boss also said the current maize harvest had been poor and significant volumes of raw maize needed to be imported.

Overall group volumes declined 9,2 percent for the year, with gross margin flat against the prior year.

The Group generated $6 million of free cash during the period.

The Board has declared a final dividend of 4,65 cents per share – bringing the total dividend for the year to 7,76 cents per share —payable on or about November 10.

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