eBusiness Weekly
Michael Tome
Industrial conglomerate, Innscor Africa Limited’s operating profit shot up by 18 percent to $77,1 million for the year to June 2018 from $65,5 million recorded in the prior comparable period.
The group’s total revenue steadily increased by 9 percent to $631,2 million in the period under review from $580,3 million recorded previously.
Innscor Africa chairman Addington Chinake said the group’s aggressive performance was driven by the rebound of Irvines from a severe Avian Influenza epidemic attack which shook the subsidiary at the end of the prior financial year, coupled with the surge in bread prices. Bread volumes increased by 12 percent over the comparative year. The bakery industry is however struggling with wheat supplies.
Management said the most topical issue right now is that of wheat, “Zimbabwe does not produce enough wheat for its own consumption so we do have quite large imports requirements”.
“In that respect the country has a liability for wheat of around $37,5 million dollars and we have been getting very good support from the Central Bank especially in the first part of the financial year but quite sporadic in the second half of the financial year.
The authorities are very well briefed on the matter and are working on a mechanism to sustain that liability to ensure that the ongoing supply of wheat continues.
“Second half revenues were also aided by improved day-old chick supply and small price increases awarded in the bread category in the final quarter of the year.
“The improved product mix, favourable raw materials position and continued right control in operating costs resulted in operating profit growing by 18 percent over the comparative year to $77,1 million,” said Chinake.
Profit for the year from continuing operations rose by 45 percent to $48,7 million from $33,6 million while the group’s borrowings were cut to $34,5 million from $40,1 million.
Innscor Africa intends to continue supporting policies aimed at making the country more self-sufficient which is critical in cutting the import bill. Hence the group wants to increase support on initiatives like contract farming of essential raw materials like maize, wheat and soya beans, while also identifying ways of increasing local milk production.
The group continues to bank on Irvines’ recovery to full capacity. The restoration of normal local day-old chick supply is critical in the reduction of the group’s foreign currency requirements.
Going forward, the group has expressed confidence with the new leadership that is adopting an approach very much focused on reviving the economy and creating a conducive business environment, as well as re connecting with key regional and international players.
