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Oliver Kazunga, Senior Business Reporter
THE country’s largest milk processor, Dairiboard Zimbabwe Limited, has recorded a 100 percent surge in foreign currency earnings to US$3,4 million for the year ended December 31, 2019.

In a statement for the period under review, DZL attributed the positive performance to the continued implementation of a robust export strategy.

“Export revenue grew by 100 percent from US$1,7 million to US$3,4 million as the company continued to drive exports in order to increase its regional footprint and to generate foreign currency to cover import requirements,” said the dairy processor.

During the period under review, turnover improved by 60 percent to $1,115 billion driven by growth in exports and necessary product price adjustments.

Sales volumes dropped by 17 percent against an industry average of 23 percent for the manufacturing sector.

The liquid milk sub-sector achieved a marginal growth of 0,2 percent, due to an increase in local raw milk intake.

“Raw milk intake grew by 10 percent compared to national milk growth of 7,2 percent, benefiting from milk supply development initiatives targeted at small, medium and large scale milk producers,” it said.

The beverages category, DZL said, declined by 23 percent, while the food sub-sector, which accounts for nine percent of the sales volumes, declined by 39 percent.

“The drop in volumes was minimised, relative to the industry performance, due to strong brands and extensive market research. This allowed the business to sustain capacity utilisation of 44 percent against a manufacturing industry average of 36,4 percent,” said the manufacturing company. DZL achieved an operating profit of $90 million compared to $55 million in 2018. An operating profit margin of 8,1 percent was attained up from 7,9 percent in the prior year.

“The improved performance was on account of reduced fixed overheads, diligent procurement practices, and an intensified drive to improve operational efficiencies. A profit after tax increase to $142 million from $36 million in the prior year was recorded. Foreign liabilities reduced from US$3,9 million in 2018 to US$0,93 million in 2019, a 76 percent drop as the company focused on managing and reducing foreign currency denominated debts.

“Disposal of Dairiboard Malawi was finalised in the third quarter of 2019. At the time of the disposal, the liabilities of the subsidiary exceeded assets and the group realised a gain of $15,2 million,” said DZL.

On the outlook, the dairy processor said the Covid-19 global pandemic will have far reaching and unpredictable impact on the doing business front in 2020 and beyond.

“The full effect on the business and the economy at large is still unknown. However, it is envisaged that it will have very significant negative impact on the company’s performance,” it said. — @okazunga.