DAIRIBORD Holdings registered a turnover of $7,5 billion in the half year ended June 2006, down 5% from turnover achieved in the comparable period previous year.
Out of the $7,5 billion turnover, $374,4 million came from exports, whose sales v
olume surged 42% during the period under review.
However, operating profit increased by 9% to $849,4 million while attributable earnings, after monetary losses, decreased to a loss of $18,3 million.
Total sales volumes slumped by 24% compared to the same period last year. Volume of raw milk supply went down 13% despite an increase in producer prices by more than the inflation rate.
“The group’s financial results were satisfactory under a very difficult economic and business environment characterised by shortages of inputs as well as very much subdued demand,” the group’s board said in a statement accompanying financial results.
The board said the cost of raw materials, utilities and spares increased at a rate far higher than that of inflation.
“The contribution of the subsidiary Lyons was significantly reduced as it was the worst affected by depressed demand,” the board added.
Dairibord is the holding company of Lyons and NFB Logistics. Lyons’ turnover increased by 928% to $4,9 billion while profit from operations increased by 1 445% to $1,1 billion.
“The exacerbating hyperinflationary and monetary environment imposed an increased demand on working capital requirements which resulted in difficulties being faced with trade debtors.”
Dairibord was incorporated in July 1994 following the legal status change under the government’s Economic Structural Adjustment Programme of the Dairy Marketing Board from a parastatal to a commercial company.
It became the first state-owned company to privatise in July 1997.
Under its strategic expansion programme, Dairibord acquired 60% equity in Dairibord Malawi in January 1998 and acquired Lyons Zimbabwe in April 2001.
In December 2002, Dairibord acquired 40% shareholding in Charhons. Lyons continues to operate as an independent subsidiary of Dairibord.
Dairibord is a major player on the Sadc and Comesa markets with exports making up approximately 8% of the company’s total sales revenue.
Its major export markets include Botswana, Zambia, Tanzania and Malawi.