National Foods volumes for the interim period to December 31, 2023, grew by 3,4 percent to 285 000 tonnes from the comparative period, largely driven by growth from the Stockfeeds.
The flour division also contributed to growth, though to a limited extent.
Mr Edwin Manikai, the group’s chairman, said in a statement of the financials that the gains were offset by losses in rice volume following the banning of exports out of India, which in turn led to a significant increase in global prices.
As a result, revenue for the half-year period increased by 3,3 percent to US$172 million, with the moderate increase being largely volume-related.
However, gross profit dollars decreased by 2,1 percent, or US$784 000 in absolute terms, as pricing was moderated to maintain volume momentum.
Mr Manikai said operating costs, which continued to rebase in real terms, increased by 7,9 percent to US$25,7 million, driven mainly by power both from the grid and generators, repairs and maintenance, and higher wages at the factory floor level.
“As a result, operating profit before depreciation, financial loss, interest, equity accounted earnings, and tax at US$11 million was 21 percent below the comparative period,” he said.
He noted that there was also a substantial reduction in interest costs, which declined from US$3,3 million in the comparative period to US$0,9 million as the comparative period was heavily impacted by the sudden and extreme increase in local currency interest.
“These two factors drove the group’s current period profit before tax to US$9,6 million, an increase of 56 percent over the comparative period.”
Mr Manikai said the investment in working capital reduced significantly during the period under review on the back of a return of creditor funding, closing the period at US$22,9 million.
In terms of operations, the flour milling division increased by 5 percent over the comparative period, largely driven by lower wheat pricing, which in turn lowered flour pricing.
Mr Manikai said National Foods continues to be a key taker of the 2023 local wheat harvest, having purchased more than 60,000 tonnes to date, with most of this volume having been procured from the A Growth contract farming scheme.
“Stockfeed volumes continued to show encouraging growth, closing 14 percent above the comparative period on the back of strong performances in the poultry and beef categories.
“Additional investment to improve the efficiency of the manufacturing platform will be undertaken in the period ahead,” he said.
During the interim period under review, maize volumes declined by 9,5 percent over the comparative period, although there was some recovery towards the end of the current period under review.
Mr Manikai said National Foods had a substantial import programme in place for raw maize, and it is expected that supplies to the market will be consistent for the foreseeable future.
Volumes in the down packed unit, which primarily packs rice and salt, declined by 17 percent over the comparative period.
Mr Manikai said India, which is the group’s main source of value rice, banned rice exports to protect domestic supplies, and this led to minor supply disruptions and also caused global rice prices to increase significantly, impacting offtake.
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