Dairibord’s forex earnings surge

Author Name
Respect Gwenzi
Stock Market 6 months ago

Harare – Dairibord Zimbabwe Limited (DZL) reported an impressive sales volume recovery across all segments in the third quarter ended 30 September 2020 and on the export side, the Group continues to do well.

In a statement accompanying the trading update for the third quarter ended 30 September 2020 (Q3 2020), the Group highlighted that its robust export strategy to counter economic fallout at home continues to bear fruit.

“The drive to generate foreign currency revenue and contribute towards the company’s foreign currency requirements continued to bear fruit with year to date foreign currency revenue up 50% from 2019,” the Group said.

The Group has also managed to mitigate the negative impact of foreign currency risk by reducing foreign currency liabilities.

Foreign currency liabilities closed the period at US$0. 771 million (including a long term loan of US$0.302 million) down 34% from US$1.161 million at the end of June 2020.

The Group remains sufficiently liquid with a current ratio of 1.55.

“Focus on optimising the cash management cycle saw the cash to credit ratio in September improve to 36:64 from 18:82 in December 2019.”

During the Q3 period, sales volumes grew by 32% ahead of Q2. Growth was recorded across all product categories with liquid milk, 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 vs Q2 2019.

Meanwhile, revenue for the quarter in inflation-adjusted terms was 43% (155% in historical terms) above the prior quarter and 8% (810% in historical terms) above Q3 2019.

“Year to date revenue was 8% below the same period in 2019. The cumulative reduction is on account of depressed H1 performance”, the Group said.

DZL is the largest dairy company in Zimbabwe; producing and marketing a range of fresh milk and ready-to-drink and long-life milk products. Its export markets include Zambia, Botswana, Malawi, Mozambique and South Africa.

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