Harare – Zimbabwe stock exchange listed company Dairibord Holdings Limited is set to exit Malawi by June 2019 through disposal of Dairibord Malawi Limited, official reports confirm. The discontinued Daribord Malawi operation posted an after tax loss of $0.693 million for the year ending December 2018, a 16.7% upswing from 2017’s loss of $0.593 million. The Group’s chief executive Anthony Mandiwanza attributed these cumulative losses to under-capitalisation as the flagship Zimbabwe operations failed to recapitalise the Malawi unit as a result of Zimbabwe’s documented economic challenges. At an analyst briefing in Zimbabwe recently, Mandiwanza reiterated his views that Dairibord Malawi’s challenge was of capital nature.
Dairibord Holdings underwent a factory and labour rationalisation in 2013 as part of its recovery strategies. This was followed by the consolidation of strategic business units in 2017 as the company adopted a lean organisational structure. In its unaudited financial results for year ending December 2018, Dairibord Holdings posted a profit after tax of ZWL$5,782,000.This was 326% above the group’s realised profit of ZWL$1, 355,000 in year 2017. Operating in a volatile environment characterised by high inflation, foreign currency shortages, raw material supply bottlenecks and inadequate raw milk supplies, Dairibord Holdings leveraged on firm consumer demand and supplier relationships to maintain its market dominance. With an asset base of ZWL$78,553,000, Dairibord Holdings has a wide product portfolio incorporating milks, beverages and foods.
After declaring a shareholder dividend of 0.7 RTGS cents (Zimbabwe currency) per share for the year ended 31 December 2018, Dairibord approximates a revenue growth of 40% and volume growth of 6% for its product portfolio in 2019. This growth forecast will leverage on the anticipated positive impact of the recently relaxed foreign currency exchange rates on foreign currency availability monetary and the anticipated growth in milk production in year 2019. Realisation of these growth forecasts will tussle against the country’s continued foreign currency shortages, inflationary pressures, anticipated low agriculture output in 2019, a high country risk profile and effects of the March 2019 cyclone Idai whose destruction to infrastructure, livestock and livelihoods in Zimbabwe, Malawi and Mozambique threatens to affect national fuel supplies and transport networks in Zimbabwe. From a prudent perspective, Dairibord Zimbabwe will register at least 30% and 3% in revenue growth and volume growth for year 2019 respectively.