Zambeef has posted supernormal earnings and is expecting to record higher earnings per share – EPS of 3,290% in kwacha (2,167% in US dollars) compared to the half year period ended 31 March 2020. The company half year revenues have hit K2.2billion (about US$103 million).
According to information obtained by the Zambian Business Times-ZBT, the increase in earnings per share are predominantly due to the strong start that the company had to the financial year, delivering results of pre-pandemic levels.
However, analysts have challenged the company’s pricing decisions and wondered whether zambeef has been too aggressive as meat and poultry prices have been sighted as one of the national food basket items which consumers have been complaining about. The recent Zamstats report sighted beef and meat products as being the highest drivers of inflation in Zambia.
Zambeef company secretary Mwansa Mutimushi said the results are expected to report revenue of about K2.2 billion and a reported Profit After Tax for the period of about K54 million. Mutimushi said the cost containment embarked on by management also continues to yield significant savings and contributed positively to the earnings.
She said improvements in the load shedding situation, following the good rains, resulted in reduced generator fuel expenditure and improved production efficiencies.
“The board of directors of Zambeef advises the Shareholders of the Group that the Earnings per Share (EPS) for the half-year period ended 31 March 2021 is expected to be 3,290% higher in Kwacha (2,167% higher in USD) than that for the half year period ended 31 March 2020.
The increase in earnings is predominantly due to the strong start that the Company had to the financial year, delivering results of pre-pandemic levels,” Mutimushi said.
She also said the half year period continued to present challenges in the operating environment, resulting from the Covid-19 pandemic and the previous 2020 economic uncertainties, despite greater stability compared to the second half of the 2020 financial year.
The Zambeef company secretary said the rising inflation put pressure on consumer disposable incomes and reduced the share of wallet going towards food spend. She said supply constraints on some of Zambeef’s product lines further put pressure on cost of inputs.
Mutimushi said despite the challenges, demand for products, particular poultry products, remained strong allowing the Company to remain in line with revenue expectations.
