The Reviewed Abridged Financial Results of National Foods Holdings Limited for the 6 Months Ended 31 December 2019 declined by 35% to 211,381 tons compared to the same period in 2018 according to the company’s chairman Todd Moyo.
Operating profit for the 6 months ended 31 December 2019 went up by 93% to ZW$ 341 617 compared to the same period last year.
Moyo said, “There were declines across all categories with the exception of maize meal, largely driven by reduced consumer spending power and the progressive removal of subsidies, notably in the Flour category.”
The volumes that decreased include flour, stockfeed, groceries and cooking oil in the 6 Months Ended 31 December 2019
“Volumes for the flour division reduced markedly for the period, decreasing by 49% versus the prior year, as the significant
subsidies which existed last year were progressively removed,” Moyo said.
“Stockfeed volumes declined by 21% versus last year, a decline that was in line with the overall market performance. The effective removal of subsidies on the maize component of feed rations caused a substantial increase in the price of stockfeed relative to inflation”
Groceries division, severely impacted by the relative affordability of rice compared to other starches, in the 6 Months Ended 31 December 2019 declined by 39% compared to the same period last year.
Snacks and treats also reduced by 42% versus the prior period, as consumers tended to focus on procuring the essential
basics according to Moyo.
“National Foods holds an effective 40% stake in Pure Oil Industries and its results are equity accounted. Volumes at Pure Oil declined by 13% compared to last year. Cooking oil volumes declined by 25%, a similar trend to other basic food categories.” he says.
Moyo, however, describes maize meal volumes as good with demand remaining strong following a relatively poor
harvest.
“The Group expects very high demand in the coming period and has embarked on a significant maize importation program. The Mutare and Masvingo maize mills have both been reopened, with the resuscitation of the Masvingo mill being especially noteworthy as it was last run in 1998,” he said.
