Innscor invest US$125 million in 2 years
Senior Business Writer
DIVERSIFIED Pan-African management holding company Innscor Africa Limited has spent in excess of US$125 million in the past two years in expansion capital investment across its numerous business units with the entity now eying to ensure the new investments operate according to the necessary operating models, driving positive returns to shareholders.
In its financial for the year ended 31 June, the firm noted that despite a tough operating environment, it continued to produce exceptional levels of free cash flow which drove the numerous ongoing capital expansion projects across the entire business portfolio, and enabled strong levels of cash returns to shareholders.
The group said business models its business continue to undergo constant refinement to ensure we remain agile and relevant in a dynamic and complex operating environment.
The refinement of the models is vital for it to provide world-class quality products, and that increasing manufacturing capacities across business units translate into economies of scale, resulting in excellent pricing for our customers, it said.
In the period under review, the Group recorded revenue of USD804,040m representing a growth of 14,7 percent over the comparative year.
“ Revenue performance was driven by improved capacity utilisation across the Group’s core manufacturing businesses, and further supported via the introduction of new product categories, category extensions, and route-to-market optimisation strategies undertaken during the financial year under review.”
EBITDA for the year closed at USD 91,061m, 13,5 percent lower than the comparative year. Currency losses dominated the financial loss line of USD15,404m as the Group faced a diminishing ability to adequately hedge against the rapid local currency devaluation experienced during the latter part of the financial year.
Depreciation and Amortisation increased by 12 percent versus the comparative year, driven by the significant investment across the Group in the F2022 to F2023 financial periods.
“Despite the significant increase in local currency lending rates in the first quarter of the financial year under review, the Group managed to contain the annual interest expense to USD13,443 m, representing a 22 percent reduction on the comparative year.
“Fair value adjustments of USD7,822 m emanate mainly from the Group’s significant biological asset holdings in the Protein Segment and the application of the provisions of IAS 41 (Agriculture), which require cost of sales of agricultural produce to be fair-valued.”
The report adds that cash generation was outstanding, and was further supported by improved efficiency across the Group’s working capital positions, combining to deliver exceptional operating cash flows of USD112,070m for the financial year under review, and representing a 12 percent increase over the comparative year.
The strong operating cash flows enabled the Group’s extensive investment programme to progress at pace, with US$70,255 m deployed toward capital expansion during the year.
Innscor Africa Limited, with a wide range of businesses that manufacture, distribute, and retail food, is a focused group of light manufacturing businesses that produce a number of Zimbabwe’s iconic brands in the consumer staple and durable product space.
Innscor Africa contributes towards the achievements of Sustainable Development Goals and National Development Strategy 1 and is one of the largest employers in the country.