Listed milk producer, Dairibord Holdings, says it registered an increase in the demand for its products during the third quarter on the back of improvement in the operating environment and foreign currency exchange rate stability.
In their trading update for the third quarter ended 30 September 2020, Dairibord said they remained the processor with the highest raw milk intake and widest milk intake base in the country.
“Demand significantly improved in the third quarter with sales volumes growing 32% ahead of Q2,” said the company.
“Growth was recorded across all product categories with liquid milks, foods and beverages growing by 15%, 74% and 50% respectively. Volumes for the quarter were 10% below Q3 of
2019 showing a recovery compared to the 46% decline recorded in Q2 2020 versus Q2 2019.”
While cumulative sales volumes remained below 2019 at 26% down, Dairibord said, the trajectory showed a recovery from the 32% decline recorded in H1.
“Revenue for the quarter in inflation adjusted terms was 43% (155% in historical terms) above prior quarter and 8% (810% in historical terms) above Q3 2019,” said the company. “Year to date revenue was 8% below the same period in 2019. The cumulative reduction is on account of depressed H1 performance. Year to date operating margins increased to 8% (10% in historical terms) compared to 6% in 2019 (10% in historical terms).”
Dairibord said although the impact of Covid-19 continued to disrupt both local and regional markets, increased trading hours and reopening of trading channels resulted in overall improvement in aggregate demand.
“The business focused on ensuring the viability of suppliers through various support initiatives including competitive prices to sustain long term milk supply growth,” said the company.
“Production output grew on the back of improved supply of raw and packaging material, however, materials, labour, electricity, fuel and water costs continued to escalate.”
The improved performance achieved in the quarter, Dairibord said, was expected to continue into the final quarter of 2020 as the local and regional economies show signs of recovery. “The business is geared to exploit opportunities presented in a more stable operating environment by mitigating supply chain disruptions and taking full advantage of weather induced demand,” said the company.
“The business will continue to implement Covid-19 risk mitigation measures as a priority to protect the interests of our stakeholders.”
