Price cuts drive Innscor volumes, revenue

INNSCOR

LISTED conglomerate Innscor Africa Holdings’ revenue for the half-year to December 31, 2015 rose to $300,6 million up from $295,7 in the prior comparable period.

The group’s results showed significant growth in volumes driven by reduction in price to the customer, resulting in improved capacity utilisation and improved efficiencies.

Operating profit from continuing operations increased 8 percent to $27,4 million as operating expenses were tightly managed resulting in a decrease in costs compared to the prior year.

And profit before tax was up by 18 percent to $20,6 million while profit after tax was up 23 percent to $15,8 million.

Subsidiary National Foods’ revenue for the period was up two percent to $170,9 million on the back of good volume performance, which rose 12,6 percent to 291,700 tonnes.

According to management, the increase in volume was due to strong performances in the maize and flour divisions.

It said the discrepancy between volume growth of 12,6 percent and revenue growth of two percent was a result of management’s strategy to lower average selling prices and grow share in an increasingly competitive market.

Gross margins increased marginally due to changes in the product mix and improved operating efficiencies in the firm’s plants.

Total operating costs grew by 11,2 percent, profit before tax was also steady up one percent to $8,86 million.

Meanwhile, meat processor Colcom reported a nine percent decline in revenue for the period under review, going down to                       $30,5 million down from $33,7 million prior year comparative.

Colcom’s profit for the period was flat at $2,84 million.

Innscor declared an interim dividend of 0,30 cents per share.

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