News

ZIMBABWE’S biggest meat processor, Colcom Holdings Limited, achieved a net profit of US$2,3 million on the back of increased volumes in its half year ending December 31, 2009.Earning per share was US$1.34.The group’s overall volumes increased by 42 percent over the second half of the previous financial year resulting in a turnover of US$29.9 million and an operating profit before interest and depreciation of US$3,6 million. Pre-tax margin at 15 percent, was higher than the target due to lower stock feed prices and improved overhead absorption rates than was previously budgeted for.The group said improved supply and quality of stock feed ingredients resulted in animal performance returning to expected levels."The improved level of demand that was experienced at the end of the last financial year continued into the period under review with volumes growing 44 percent over the last half of the previous financial year.

"This has led to greater throughput into the processing factory in particular, which in turn led to improved profitability through great absorption of fixed overheads," the group said.Similarly pie volumes grew by 40 percent over the last half of the previous financial year.During the period under review, the group said the pie division reached 100 percent of the its capacity and in response to this, new equipment was installed at the end of the period under review.However, increased costs of raw material have put pressure on the margins.Canning recorded a modest growth but additional volume is still required in order for the division to meaningfully contribute to profitability. Even though the company’s focus on its core business of pig production and processing, the group’s cattle herd was disposed of during the period.

At the Associated Meat Packers division, volumes of manufactured beef products increase by 30 percent over the first half of the previous financial year, which resulted in improved profitability.Looking ahead the group said it would continue to be aligned to the overall rate of macro-economic revival in Zimbabwe and this is still dependent on the substantial inflows of foreign direct investment coupled with additional lines of credit and access to long term finance at affordable interest rates.