Listed foods processor, National Foods Holdings Limited, has bemoaned Zimbabwe’s difficult operating environment for businesses, which has been aggravated by the advent of the Covid-19 pandemic.
The country’s economy has been underperforming for two decades now with successive governments having failed to bring about a turn around.
In a statement accompanying the company’s financial results for the year ended June 30, 2020, National Foods chairman, Todd Moyo, said the period under review was marked by a number of operational challenges.
“The recently concluded local harvest of maize and soya was negatively impacted by reduced plantings and poor weather, and significant imports of these commodities will be required up to at least June 2021.Government has launched a number of initiatives to stimulate local production of key grains, which the group fully supports and endorses.”
Moyo said increased grain productivity would boost the competitiveness of local manufacturers, which remains under intense pressure, exacerbated by the on-going liberalisation of imports of basic food products.
“The Covid-19 pandemic has regrettably had an increasing effect on the country in recent months, and the resulting economic impact has further eroded consumer spending,” lamented Moyo.
“The group has made the safety of its products, employees and consumers paramount in the face of the pandemic.”
Group volumes for the period declined by 25.3% to 456,000 tonnes compared to the same period last year.
While there were year-on-year volume declines across all categories, the quarterly volume trend during the year was largely stable, with the exception of seasonal variations in the maize division.
“Revenue however increased by 52% to ZWL$12.79 billion, reflective of higher selling prices following the progressive removal of most grain subsidies,” explained Moyo.
“Gross margin dollars increased by 48%, below the increase in revenue as the group focused on competitively pricing its products. Operational expenditure increased by 45% compared to last year, with the optimisation of the group’s cost structures remaining a key priority. As a result of the above, Profit after Tax increased by 45% to ZWL$ 1.38 billion.