Interim Results

RNS Number : 4125Q
Zambeef Products PLC
06 June 2018
 

 

6 June 2018

 

 

 

Zambeef Products plc

("Zambeef" or the "Group")

 

Interim results for the Half Year Ended 31 March 2018

 

RETAIL GROWTH DRIVES IMPROVED VOLUMES AND MARGINS

 

Zambeef (AIM: ZAM), the fully integrated cold chain foods and retail business with operations in Zambia, Nigeria and Ghana, today announces its unaudited interim results for the six months ended 31 March 2018.

 

Key Financial Highlights:

 

USD ('000)

H1 2018

USD ('000)

H1 2017

 

 

 

Revenue

123,847

118,381

 

 

 

Gross Profit

46,581

38,494

 

 

 

Operating Profit

6,297

4,502

 

 

 

Profit  before tax

2,758

590

 

 

 

Profit after tax

1,180

533

 

 

 

EBITDA

11,112

8,897

 

 

 

EBITDA Margin

8.97%

7.51%

 

 

 

Operating Profit Margin

5.08%

3.80%

 

 

Performance Overview

·     The Group has delivered a solid financial performance, driven by:

o  Strong gross profit and volume growth in the Retail and Cold Chain Food Products division and the Stockfeed division

Continued aggressive expansion of the retail network

Robust operational performance from the farming operations

 

·     Four Macro outlets opened with a further four expected to open this year

Target to open 10 new Macro outlets each year

 

·     Shoprite rollout of new stores continues

Zambia - three more store openings expected in the second half

Nigeria - one new store opened

Ghana - one new store opened and one expected in H2 2018

 

·     Second half of the year expected to see a significant number of key projects

Continue to grow the retail network and drive retail revenue to increase demand from the CCFP and stock feed operations

Commission new Copperbelt distribution hub which will increase capacity and improve efficiencies in the Copperbelt and North Western Province operations

Complete expansion of breeding farm and hatchery to increase day-old chick production from 344,000 to 430,000 birds per week

Complete new stock feed plant at Mpongwe to ensure additional stock feed capacity

 

·     Continue to look at ways of strengthening our balance sheet through

Disposal of non-core assets

Continued focus on debt reduction 

 

Commenting on these results, Chairman Dr. Jacob Mwanza said:

"The volatile economic conditions in Zambia over the previous two years, including sharp depreciation of the Kwacha against the US Dollar and relatively high inflation, presented challenges for the business. I am pleased to say that this period of uncertainty appears to be behind us. We are entering a period of relative stability in the economy, supported by tight fiscal and monetary control by Zambia's Ministry of Finance and the Bank of Zambia."

"Volume and margin growth in the Retail and Cold Chain Food products division and stockfeed division indicates that the worst of the economic hardship has dissipated."

"The Group will maintain its focus on expanding the retailing and distribution footprint and on improving margins and increasing profitability. We will continue to expand the Cold Chain Food Production capacity to meet increasing consumer demand; complete the build out of the new stock feed plant at Mpongwe and continue to strengthen our balance sheet, through the disposal of non-core assets."

 

 

For further information, please contact:

 

Zambeef Products plc

Tel: +260 (0) 211 369003

Francis Grogan, Chief Executive Officer                                            

 

Strand Hanson Limited       

Tel: +44 (0) 20 7409 3494

James Spinney

Ritchie Balmer

Frederick Twist

 

finnCap          

Tel: +44 (0) 20 7220 0500

Emily Morris

Chris Raggett

 

Powerscourt

Tel: +44 (0)20 7250 1446

Nick Dibden

Isabelle Saber

 

 

Notes to Editors

The Zambeef Group is one of the largest integrated cold chain food producers in Zambia, involved in the production, processing, distribution and retailing of beef, chicken, pork, milk, eggs, dairy products, fish, flour and stock feed. The Group also has large cereal row cropping operations (principally maize, soya beans and wheat), with approximately 7,971 hectares of row crops under irrigation, which are planted twice a year and a further 8,623 hectares of rain-fed/dry-land crops available for planting each year.

 

Further information can be found on www.zambeefplc.com

 

The information contained within this announcement is considered to be inside information prior to its release, as defined in Article 7 of the Market Abuse Regulation No. 596/2014, and is disclosed in accordance with the Company's obligations under Article 17 of those Regulations.

 

ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

 

CHAIRMAN'S REPORT

 

THE ENVIRONMENT

The volatile economic conditions in Zambia over the previous two years, including sharp depreciation of the Kwacha against the US Dollar and relatively high inflation, presented challenges for the business. I am pleased to say that this period of uncertainty appears to be behind us and we are entering a period of relative stability in the economy, supported by tight fiscal and monetary control by Zambia's Ministry of Finance and the Bank of Zambia.

Volume and margin growth in the Retail and Cold Chain Food products division and stockfeed division indicates that the worst of the economic hardship has dissipated.

GDP grew by 3.9% in 2017, compared with 3.8% in 2016, attributed to a bumper crop harvest in the previous season, rising copper prices and moderating inflation.

The Kwacha strengthened marginally during the period with the exchange rate ending the period at around ZMW9.48/USD, having started the period under review at ZMW9.67/USD. Meanwhile, annual inflation continued its general downward trend and the Bank of Zambia reduced its Monetary Policy Rate by 50 basis points, from 10.25% to 9.75% in February 2018, enabling the Group to negotiate lower interest rates on both ZMW and USD short-term finance facilities.

An outbreak of cholera during the rainy December and January months caused the temporary closure of a number of Zambeef retail stores. The financial impact on the Group was negligible and Zambeef honoured its commitment to support local communities in partnering with the Ministry of Health to mitigate the disease by donating chlorine, other disinfectants and cleaning materials.

An outbreak of Foot and Mouth Disease was announced by the Ministry of Fisheries and Livestock on the 6th of April 2018. The Group's Kalundu Dairy was affected by the disease resulting in the biological value of the dairy cattle reducing by approximately USD 690,000. Also, the cost of processed milk production will increase by approximately USD 200,000 in H2 of 2018 due to the need to replace approximately 10,000 litres of reduced fresh milk production per day with more expensive reconstituted milk. The total financial impact of the disease has been provided for in the March 2018 results.

 

TRADING RESULTS

The Group achieved a Profit After Tax (excluding discontinued operations) of ZMW23 million (USD2.3 million) versus ZMW5.2 million (USD0.5 million) in the prior period. Volumes and gross margins have also increased in our core divisions of Retail and Cold Chain Food Products (CCFP) and Stockfeed.

This performance was particularly encouraging given the significant increase in overheads during the period as a result of the Government's move to eliminate subsidies on fuel and electricity. We have also seen an increase in labour costs and costs from road tolls, licence fees and levies on livestock and crops.

Retail and Cold Chain Food Products (CCFP)

Zambeef's chain of 205 retail outlets - both own-brand and within Shoprite supermarkets - remain at the heart of the business, with demand from consumers driving supply throughout the business.

During the period, four new Zambeef Macro retail stores were successfully opened in Zambia, with a further four Macro stores opening in the second half of the year. 

The Group closed nine small retail stores as part of its ongoing drive to optimise revenue and efficiencies across the division.

The Retail and Cold Chain Food Products division has delivered a very satisfactory EBITDA of ZMW98.7 million versus ZMW72.8 million in the same period last year (USD9.97 million compared with USD7.4 million), generating an EBITDA margin of 10.5% versus 8.5% last year.

The Group will continue the focus on this division and will continue to drive Cold Chain Food Products volumes through the expanding Retail stores network.

Stockfeed

The new Novatek stockfeed plant in Mpongwe has already reached 42.6% capacity, compared with a target of 30%, and is making a significant contribution to the division's profitability and overall Group performance. The Stockfeed division increased Gross Profit margins from 19.4% to 26.9% compared to the prior period, which resulted in an increase in Gross Profit from ZMW62.8 million to ZMW82.8 million (USD6.4 million to USD8.4 million).

Cropping

The Group is one of the largest cereal row cropping operations in Zambia, with approximately 7,787 hectares of row crops under irrigation, which are planted twice a year, and a further 8,694 hectares of rainfed/dry-land crops available for planting each year. The Mpongwe estate has performed well during the first six months and we expect yields for the summer crop to be ahead of budget.

Soya and maize prices have reduced from USD 430 per ton and USD 230 per ton respectively in March 2017 to USD 415 per ton and USD 165 per ton in March 2018. The soya price in particular is still well below the price achieved in March 2016 of USD 530 per ton. The reduced commodity prices in March 2018 have contributed to the gross profit in 2018 being 2.1% behind the gross profit achieved in March 2017.

Overall, the cropping division has delivered a strong EBITDA of ZMW23.9 million versus ZMW19.4 million in the same period last year (USD2.4 million compared with USD2 million). This is due largely to overheads reducing in March 2018 due to a reduction in manpower costs.

INVESTMENT

Zambeef spent USD7.5 million on capital investment for continuing operations in the first half of the year.

USD2.9 million was spent on the continued roll-out of new modern Macro retail outlets across Zambia, with four stores opened in the six months. The Company plans to open a further four Macro retail outlets in the second half of the year. Heroes Macro

is the first of these and it opened in May 2018.

Outlets in border towns have also flourished, enabling the Company to capitalise on its long-held strategy of meeting growing regional demand.

These new world-class outlets are proving popular, with like-for-like sales increasing from the prior period. Their success has accelerated our review of legacy stores with a view to phasing out poorer performing outlets to optimise marginal contribution. This approach will also help improve efficiencies in distribution and reduce some of the additional overheads mentioned earlier.

In October 2017, Zambeef welcomed the Zambian President, H.E. Edgar Chagwa Lungu, as he formally commissioned the Company's USD30 million hatchery and stockfeed mill at Mpongwe Farm on the Copperbelt. This was the largest agricultural investment in the province to date.

Zambeef completed the sale of 90% of Zambeef's shareholding in its wholly owned subsidiary Zampalm Limited, to the state-owned Industrial Development Corporation (IDC) for a cash consideration of USD16 million on 6 April 2018, in line with the Group's ongoing strategic focus on reducing Group debt. Zambeef continues to oversee the operation under a management agreement that includes a rollout of an outgrower scheme to develop further the remote rural communities of Muchinga, where the plantation is located.

Group capital expenditure in the full year is budgeted at USD16.0 million, rather than the USD14.5 million originally projected, due to the additional floor space needed at its new Kitwe beef processing plant, which is expected to open in the second half of the 2018 financial year, and several new retail Macro outlets, as set out below.

BOARD CHANGES

Finally, as we enter into a renewed period of growth for Zambeef, I would like to thank Co-founder and former Joint Chief Executive Officer Dr Carl Irwin, who retired from the Group on 31 March 2018 after 23 years of service, during which time he and Francis Grogan grew the Company to the impressive heights it has reached today.

On 24 May 2018, subsequent to the period end, Tim Pollock, Joint Chief Executive Officer announced his resignation from the Board for personal reasons. We wish to thank Tim for his contribution to the Company.

 

OUTLOOK

Zambia's GDP is expected to grow by 5.5% in 2018. The clearance of government arrears and continued close attention to monetary policy conditions are likely to strengthen the position of the financial sector and spur confidence in consumption and investment lending. Equally, firm international copper prices and improved domestic production from newer and recently refurbished mines are expected to support exports.

We expect this economic strengthening to continue to boost consumer demand across all sectors, with a firm trickle-down to our core target consumers in lower-income markets.

 

Dr Jacob Mwanza

Chairman

5 June 2018

 

 

CHIEF EXECUTIVES' REVIEW

 

OVERVIEW

In 2014, Zambeef set out a strategy of retail growth in order to drive cold chain food and stockfeed production. We have remained steadfast in this vertical integration approach, capitalising on the previous two years of sluggish economic growth to build a firm foundation from which to project the business on to a new level.

With signs of economic recovery now evident, we are pleased to report that this strategy has started to generate improved returns on the capital investment we have made in recent years.

The Group has achieved a Profit After Tax (excluding discontinued operations) of ZMW23 million (USD2.3 million) versus ZMW5.2 million (USD0.5 million) in the prior period. Volumes and gross margins have increased in our core divisions of Retail and Cold Chain Food Products (CCFP) and Stockfeed, and the Cropping division has performed well operationally.

The pleasing Group performance was achieved in spite of a significant increase in overheads during the period as a result of the Government's move to phase out subsidies on fuel and electricity, with overheads increasing by 18.8% in ZMW (17.7% in USD) during the period We have also seen an increase in manpower costs and costs from road tolls, license fees and levies on livestock and crops.

STRATEGIC FOCUS

Zambeef remains unwavering in its strategic focus on the core operations in which it is best-in-class: retail and cold chain food products, stockfeed and cropping.

As a result, we continued our divestment of non-core assets to reduce our debt further and generate additional cash, concluding the 90% sale of our shareholding in Zampalm Limited to the Industrial Development Corporation (IDC) for a cash consideration of USD16 million during the period, as previously announced.

Retail and Cold Chain Food Products

It is the retail demand that continues to drive Zambeef's production along the value chain, reinforcing our position linking the country's farmers with consumers.

Zambeef's retail operations are growing from strength-to-strength, with four new Macro retail stores and one Shoprite store opening in Zambia and in Nigeria in the first half of the financial year.

This growth emphasises the Group's market-driven approach, through which retail demand drives production along our value chain.

The Macro stores, which sell our full range of cold chain food products, along with Novatek stockfeed, and in some instances Zamleather's Zamshu brand footwear, are bringing world-class standards of hygiene, service, security and affordability to our traditional markets in low- and medium-density urban and peri-urban areas.

Revenue from Macro outlets grew 66% in Kwacha terms (65% in USD) compared with the previous year.

The new outlet in Nakonde is in line with our approach of also targeting border towns to tap into the growing regional demand for our products.

Our Zambeef branded outlets account for 82% of retail sales, while our operation of in store butcheries at all Shoprite supermarkets across Zambia accounts for 18% of retail turnover. This balance has remained relatively unchanged in recent years and ensures a diversification of exposure across retail segments.

The Group closed nine small retail stores during the period in its ongoing drive to optimise its real estate.

The growth in market demand, and associated development of Zambeef's retail chain, continues to drive cold chain food production as we add value and provide linkages between small-scale, emerging and commercial farmers and end consumers.

Cold chain food product volume increased by 6.7%, driven by strong performance in the chicken and beef sectors.

Beef volumes increased by 10.6% from 8.5 million kgs to 9.4 million kgs.

Chicken volumes rose by 14.3% from 5.6 million kgs to 6.4 million kgs, with some 70% of chickens supplied by outgrower farmers. Demand outstrips supply as Zambeef continues to formalise a market that remains largely driven by the informal sector, presenting significant opportunities for growth.

Dairy volumes increased by 9.3% from 9.3 million litres to 10.2 million litres.

Pork volumes declined from 5.5 million kgs to 5.3 million kgs during the period under review.

 

Stockfeed

Zambeef's stockfeed operation trades under the brand name Novatek. Its second stockfeed plant was commissioned at Mpongwe Farm on the Copperbelt in October 2017. It has already produced 25,584 tons (42.6% of capacity) of the total of 94,203 tons produced during the six months.

Zambeef is one of the largest buyers of soya beans and maize from local farmers. The Company bought 75,000 tons last year as inputs into the stockfeed operations. We predict that 110,000 tons will be required this year.

20% of the stockfeed production is sold through Zambeef outlets, versus 11% in 2017. The strategy of expanding the Retail infrastructure to increase demand for stockfeed is clearly working. A further 30% of the stockfeed production is consumed in the Company's Zamhatch and Zamchick divisions. The other 50% is sold to third-party distributors. Chicken feed accounts for three quarters of stockfeed production, creating an opportunity for growth linked to the chicken segment.

Cropping

Zambeef's Mpongwe Farm is the heart of the Group's farming operations, and continues to live up to its reputation as one of the best farms in the region.

The Group harvested 44,730 tons of soya beans during the period, versus 43,000 in 2017, with EBITDA increasing by 22.8%.

Zamhatch

Demand for day-old chicks from Zambeef's Zamhatch subsidiary is exceeding supply. This reinforces the fact that Zambeef is an integral part of the nation's agricultural supply chain, with more than half of our chicks sold to small-scale farmers and entrepreneurs who then serve the traditional live-bird market, which still accounts for 75 percent of poultry market share.

Zamhatch incubates 400,000 eggs a week, with an industry-standard 86 percent success rate, producing 344,000 day-old chicks. We are working on increasing capacity to 500,000 eggs per week in 2019 and then 600,000 eggs per week in 2020 in order to meet demand. The cost of this expansion will be approximately USD 2 million per year.

Outlook

Zambeef's clear long-term strategy is translating into improved results. We will remain steadfast in our plans going forward, which include:

·      Consistent revenue growth through expansion of our retail network, driving our cold chain food product and stockfeed operations;

·      Margin improvements leveraged from continued capital investment in high margin areas of the business coupled with stringent control of administration costs; 

·      Cash generation through improved margins, cost control, inventory management and prudent capital expenditure;

·      De-risking the business by maintaining prudent gearing levels; and

·      Divestment of non-core assets.

·      The continued execution of the above strategy, together with capital expenditure being more focused on higher returning segments of the Group, should result in operating free cash flow being generated from 2018, and the Group returning to a policy of paying dividends.

As the macro-economic environment improves, we expect volumes to continue their upward trend. The continued rollout of Macro retail stores should also continue to grow revenue and margins.

Four additional Macro stores are scheduled to open in the second half of the year, including the flagship Heroes Macro in Lusaka, which opened in May 2018. Some 14 sites have been bought and await development, keeping us on target to open 10 new Macro outlets every year.

In addition, Shoprite continues to roll-out new stores, with three expected in Zambia in the second half of 2018. One new store opened in both Nigeria and Ghana, and a further store is planned in Ghana for the second half of the year. 

The Mpongwe stockfeed mill continues to perform ahead of expectation. The stockfeed division will undoubtedly continue to increase volumes and contribute materially to the Group.

The Cropping division continues to perform well operationally and is an integral part of the business.

On 6 April 2018, the Zambian Ministry of Fisheries & Livestock announced an outbreak of foot and mouth disease (FMD) on farms in the Chisamba and Chibombo districts and imposed movement restrictions upon livestock in these districts. FMD was confirmed on the Group's Kalundu dairy farm in Chisamba district and daily milk output fell sharply. We do not expect this to materially affect the business in the medium to long-term and projected losses have been provided for in the March 2018 financial results.

We have entered the second half of the financial year with a renewed sense of optimism that the difficult times of recent years are behind us. We have used that time productively to establish a solid base from which to move forward now that market conditions have started to improve.

The continued dedication of our management and staff, supported by a strong Board, remain key to this as we progress into an exciting new phase of growth.

 

Chief Executive Officer                                                                                                                       

5 June 2018

 

FINANCIAL REVIEW

 

The first six months of the 2018 financial year have seen the Zambeef Group continue to grow. Good revenue and strong margin growth have been the main contributors. Revenue for the Group increased by 5.6% in ZMW and 4.6% in USD, while Gross Profit margins increased from 32.5% to 37.6%, resulting in Gross Profits increasing by 22.1% in ZMW from ZMW378m to ZMW461m (21% in USD from USD38m to USD47m). Overheads increased by 18.8% in ZMW (17.7% in USD) from ZMW293m to ZMW348m (USD30m to USD35m). The strong Gross Profit performance enabled the Group to achieve Operating profits of ZMW62m versus ZMW44m (USD6.3m vs USD4.5m) which represents a 41.1% increase in ZMW and a 39.9% increase in USD. 

 

Interest costs reduced by 9.9% in ZMW (10.7% in USD) as a result of lower interest rates, largely due to the reduction in the Bank of Zambia Policy Rate, which decreased our ZMW interest rates significantly compared with the prior period. As a result, Zambeef's PAT excluding discontinued operations increased from ZMW5.2m to ZMW23.0m (USD0.5m to USD2.3m).

 

The highlights of this period were the 9.9% (in ZMW) revenue growth in the Retail and Cold Chain Food Products (CCFP) division with a strong increase of 28.3% (in ZMW) in gross profits. Gross margins increased from 25.9% in 2017 to 30.3% in 2018. Zambeef continues to establish itself as best-in-class in terms of its production, distribution and retailing of the Cold Chain Food Products delivering a very satisfactory EBITDA margin of 10.5% compared to 8.5% in 2017. In addition the Stockfeed division delivered an excellent gross profit of ZMW82.8m versus ZMW62.8m in the prior period, representing a 31.8% increase.

 

The focus for the next six months will be on:

·    Consistent revenue growth through expanding the retail network and addressing supply constraints in the CCFP and stockfeed   operations;

·      De-risking the business through reducing gearing and dollar debt and E&S/Food Safety strategies; and

·      Improving cash conversion from strong working capital control and tight control on Capex with effective managerial responsibility.

 

Exchange rate movements

 

This period has seen a 2% appreciation of the ZMW with the exchange rate, starting the period at 9.67 ZMW/USD and closing the period at 9.48 ZMW/USD. The table below shows the comparative exchange rates over the periods:

 

 

ZMW/USD

 

Closing Rate 31st March 2017

9.66

 

Closing Rate 30th September 2017

 9.67

 

Closing Rate 31st March 2018

 9.48

 

 

 

 

Average Rate for 6 months to 31st March 2017

9.81

 

Average Rate for year ended 30th September 2017

 9.52

 

Average Rate for 6 months to 31st March 2018

9.90

 

The appreciating currency has resulted in the Group reporting realized exchange gains of ZMW4.2m (USD0.4m) for the first 6 months.

 

ADMINISTRATION AND OVERHEAD COSTS

 

As mentioned above, overheads have increased by 18.8% (in ZMW). The following are contributing factors:

·     Fuel prices increased from ZMW10.72/l in September 2017 to ZMW11.09/l and again to ZMW12.01/l in January 2018 representing a total increase of 12%;

·     Electricity tariffs were increased by 50% in May 2017 and a further 15% in September 2017;

·     With inflation at approximately 7%, an average increase of approximately 10% was agreed for all union workers resulting in higher payroll costs;

·      Levy and slaughter fees have continued to increase during the year;

·      Road toll fees, which were introduced in the previous financial period, are increasing as more toll gates are opened; and

·      Repairs and Maintenance costs were incurred in Zambeef Outlets as a result of the outbreak of Cholera in January 2018.

 

CAPITAL EXPENDITURE

 

Total capital expenditure on continuing operations during the period was ZMW74.3 million (USD7.5 million) against a anticipated capital expenditure of ZMW157.3 (USD16m) for the year.

 

The main capital expenditure during the period included:

·      USD2.9m on rollout of new Zambeef Macro outlets

·      USD1.1m on new Mpongwe stockfeed plant

·      USD1.1m on expansion of Zamhatch hatchery and breeder farm

·      USD0.9m for expansion of Zam Chick processing plant

·      USD0.3m for farming replacement Capex

·      USD0.5m on the new processing and distribution hub in Kitwe

 

The capex to be incurred in the second half of 2018 is being focused towards:

·      The expansion of the retail network (four Zambeef Macros and three Shoprite stores to open before the end of 2018);

·      The commissioning of the new Copperbelt processing and distribution hub which will increase capacity and improve efficiencies in   the Copperbelt and North Western Province operations;

·     Completing the expansion of the breeding farm and hatchery to increase day-old chick production from 344,000 to 430,000 birds   per week; and

·      Completing the new stock feed plant at Mpongwe to ensure additional stock feed capacity.

 

TERM FINANCE

 

No additional term finance was sourced during the period under review.      

 

DIVISIONAL PERFORMANCE

 

Table 1:  Segmental Financial summary in ZMW'000s

 

Division

 

Revenue 2018   ZMW'000

 

Revenue 2017   ZMW'000

Gross Profit 2018  ZMW'000

Gross Profit

2017

ZMW'000

 

Overheads 2018

 ZMW'000

 

Overheads 2017 ZMW'000

 

EBITDA 2018  ZMW'000

 

EBITDA 2017  ZMW'000

Retail & Cold Chain Foods

 

941,313

 

856,793

 

285,105

 

222,181

 

(186,401)

 

(149,393)

 

98,705

 

72,788

 

 

 

 

 

 

 

 

 

Stock Feed

307,598

324,701

82,809

62,830

(37,867)

(20,141)

44,942

42,689

 

 

 

 

 

 

 

 

 

Cropping

110,356

201,901

78,791

79,745

(54,920)

(60,309)

23,871

19,436

 

 

 

 

 

 

 

 

 

Others

65,916

79,009

14,447

12,868

(8,487)

(10,611)

5,960

2,257

Total

1,425,183

1,462,404

461,152

377,624

(287,675)

(240,454)

173,478

137,170

 

 

 

 

 

 

 

 

 

Less: Intra/Inter Group Sales

     (199,100)

 

(301,086)

               

-  

           

   -  

             

  -  

            

   -  

           

    -  

            

   -  

less Central Overhead

          

   -  

      

      -  

         

      -  

        

      -  

        (59,995)

         (52,199)

        (59,995)

        (52,199)

Group Total

1,226,083

1,161,318

461,152

377,624

(347,670)

(292,653)

113,483

84,971

 

 

DIVISIONAL PERFORMANCE

 

Table 2:  Segmental Financial summary in USD'000s

 

Division

Revenue 2018  USD'000

Revenue 2017  USD'000

Gross Profit 2018 USD'000

Gross Profit 2017 USD'000

Overheads 2018

USD'000

Overheads 2017

USD'000

EBITDA 2018

USD'000

EBITDA 2017

USD'000

Retail & Cold Chain Foods

        95,082

87,339

28,799

22,648

(18,828)

(15,229)

9,970

7,420

 

 

 

 

 

 

 

 

 

Stock Feed

        31,071

33,099

8,365

6,405

(3,825)

(2,053)

4,540

4,352

 

 

 

 

 

 

 

 

 

Crop-Row Crops

        11,147

20,581

7,959

8,129

(5,547)

(6,148)

2,411

1,981

 

 

 

 

 

 

 

 

 

Others

           6,658

8,054

1,459

1,312

(857)

(1,081)

603

230

 

 

 

 

 

 

 

 

 

Total

      143,958

149,073

46,582

38,494

(29,057)

(24,511)

17,524

13,983

 

 

 

 

 

 

 

 

 

Less: Intra/Inter Group Sales

      (20,111)

      (30,692)

                  -  

                  -  

                  -  

                  -  

 

 

less Central Overhead

                 -  

                 -  

                 -  

                 -  

        (6,060)

        (5,321)

        (6,060)

        (5,321)

Group Total

      123,847

118,381

46,582

38,494

(35,117)

(29,832)

11,464

8,662

 

 

RETAIL AND COLD CHAIN FOOD PRODUCTS

 

 

2018     ZMW'000

2017     ZMW'000

%

Change 

2018     USD'000

2017     USD'000

%

Change 

Revenue

941 313

856 793

9.9%

95 082

87 339

8.9%

Gross Profit

285 105

222 181

28.3%

28 799

22 648

27.2%

Overheads

(186 401)

(149 393)

24.8%

(18 828)

(15 229)

23.6%

EBITDA

98 705

72 788

35.6%

9 970

7 420

34.4%

 

Revenue in the Retail and Cold Chain Food Products division increased by 9.9% in ZMW and 8.9% in USD. Gross profit grew by 28.3% in ZMW and 27.2% in USD.

 

Overhead costs increased by 24.8% in ZMW and 23.6 per cent in USD mainly due to rises in transport, energy and employment costs. 

 

EBITDA in ZMW rose 35.6% from ZMW72.8m to ZMW98.7m, whilst in USD it increased by 34.4% from USD7.4m to USD10.0m. The business has generated a pleasing EBITDA margin of 10.5 per cent. (compared to prior year period 8.5%).  

 

The Retail and Cold Chain Food Products division includes the beef, chicken, pork, dairy, egg and fish production and processing activities which primarily supply the Zambeef and Shoprite retail chains.

 

The division delivered strong volume growth of 6.7% while  increasing gross profits. 

 

Highlights:

-              Good volume Growth

-              Strong GP Growth

-              Strong EBITDA growth

 

Challenges: An outbreak of Cholera in January 2018 led to a number of outlets being closed for a period due to their proximity to the epidemic. The epidemic had a negative effect on the sale of beef heads, bones and offal fat, but overall the financial impact on the Group was immaterial. 

 

  

RETAIL EXPANSION

 

During the period four Zambeef Macro outlets were opened with a further four expected to open this year. Fourteen further sites have been purchased and will be developed. Zambeef plans to open 10 new Macro outlets every year.

 

 

STOCK FEED (NOVATEK)

 

 

2018     ZMW'000

2017     ZMW'000

% Change

2018     USD'000

2017     USD'000

% Change

Revenue

 307 598

 324 701

-5.3%

 31 071

 33 099

-6.1%

Gross Profit

 82 809

 62 830

31.8%

 8 365

 6 405

30.6%

Overheads

 (37 867)

 (20 141)

88.0%

 (3 825)

 (2 053)

86.3%

EBITDA

 44 942

 42 689

5.3%

 4 540

 4 352

4.3%

Volume (Tons)

94 203

73 679

27.9%

 

 

 

 

The Stockfeed division has increased its market share and market leadership with volumes increasing by 27.9%  from 73,679 M.T. to 94,203 M.T. Gross profit margins have increased from 19.4% to 26.9% due mainly to low raw material prices from the 2017 crop. We expect the margins to reduce slightly in the second half as a result of the new season raw material prices increasing. However, with the Mpongwe plant continuing to perform ahead of expectation, the stockfeed division is expected to exceed its budget in H2 of 2018.

 

Overheads increased by 88% due mainly to the new stockfeed plant in Mpongwe.

 

However, the Mpongwe plant is operating well ahead of expectation and the division has delivered improved EBITDA of ZMW44.9m compared with ZMW42.7m in the prior period.

 

The Mpongwe plant produced 25,584 tons of 94,203 tons during the period. This represents approximately 42.6% of the capacity of the plant.

 

 

CROPPING

 

 

2018     ZMW'000

2017     ZMW'000

% Change

2018     USD'000

2017     USD'000

% Change

Revenue

 110 356

 201 901

-45.3%

 11 147

 20 581

-45.8%

Gross Profit

 78 791

 79 745

-1.2%

 7 959

 8 129

-2.1%

Overheads

 (54 920)

 (60 309)

-8.9%

 (5 547)

 (6 148)

-9.8%

EBITDA

 23 871

 19 436

22.8%

 2 411

 1 981

21.7%

 

               

The Cropping division has delivered pleasing results in the first six months. Soya and maize prices have reduced from USD430/M.T. and USD230/M.T. respectively in March 2017 to USD415/M.T. and USD165/M.T. in March 2018. However, yields are predicted to be ahead of budget with over 44,500 M.T. of Soya Beans and 18,000 M.T. of Maize expected to be harvested. This has resulted in gross profit being ahead of budget and slightly behind 2017.

 

Overheads decreased by 8.9%, mainly as a result of reduced manpower costs. This resulted in EBITDA increasing from ZMW19.4 in 2017 to ZMW23.9 in 2018 (USD2m to USD2.4m).

 

The winter crop, which has recently been planted, comprises 7,296 Ha of wheat, 451 Ha of winter maize and 50 Ha of Lucerne. The wheat price has increased from USD410/M.T. in September 2017 to approximately USD430/M.T. and the maize price has increased from USD115/M.T. in September 2017 to approximately USD150/M.T.

 

 

FINANCIAL REVIEW OTHER BUSINESSES (continued operations current and prior year)

 

 

2018     ZMW'000

2017     ZMW'000

% Change

2018     USD'000

2017     USD'000

% Change

Revenue

 65 916

 72 933

-9.6%

 6 658

 7 435

-10.4%

Gross Profit

 14 447

 14 019

3.1%

 1 459

 1 429

2.1%

Overheads

 (8 487)

 (11 062)

23.3%

 (857)

 (1 128)

24.0%

EBITDA

 5 960

 2 957

101.6%

 602

 301

100.0%

 

The Other divisions delivered an increase in EBITDA of 101.6% from ZMW3m to ZMW6m (USD0.3m to USD0.6m) compared to the prior period.

 

Flour Milling:

 

The mill performance was satisfactory with sale volumes stable as Zambeef continues to retail flour through its retail network.

 

Zamleather: 

 

The shoe division performed well. However, there was a decrease in world-wide hide prices and the market for lower-grade hides is sluggish.

 

 

REPORT OF THE DIRECTORS

 

In compliance with Division 8.3 of the Companies Act, the Directors submit their report on the activities of the Group for the six month period ended 31 March 2018.

 

1.            Principal activities

Zambeef Products PLC and its subsidiaries ("Group") is one of the largest agri-businesses in Zambia. The Group is principally involved in the production, processing, distribution and retailing of beef, chicken, pork, milk, dairy products, eggs, edible oils, stock feed and flour. The Group also has large row cropping operations (principally maize, soya beans and wheat), with approximately 7,971 Ha of irrigated row crops and 8,623 Ha of rain-fed/dry-land crops available for planting each year. The Group is also in the process of rolling out its West Africa expansion in Nigeria and Ghana.

 

2.             The Company

  The Company is incorporated and domiciled in Zambia.

                Business address                                                                                 Postal address

                Plot 4970, Manda Road                                                                        Private Bag 17

                Industrial Area                                                                                       Woodlands

                Lusaka                                                                                                   Lusaka

                ZAMBIA                                                                                              ZAMBIA

 

3.             Share capital

Details of the Company's authorised and issued share capital are as follows:

 

31 Mar  2018

 

30 2017

 

ZMW'000s

USD'000s

 

ZMW'000s

USD'000s

Authorised

 

 

 

 

 

700,000,000 ordinary shares of ZMW0.01 each

7,000

938

 

7,000

938

Issued and fully paid

 

 

 

 

 

Ordinary shares

 

 

 

 

 

300,579,590 ordinary shares of ZMW0.01 each

3,006

449

 

3,006

449

Preference shares - convertible redeemable

 

 

 

 

 

100,057,658 of ZMW0.01 each

1,000

100

 

1,000

100

 

4.             Results

                The Group's results are as follows:

                                                                                                 Unaudited                                                              Audited               

 

6 months

to

 

6 months

to

 

  6

months to

 

6

months to

 

Year ended

 

Year ended

 

31 March  2018

 

31 March  2018

 

31 March  2017

 

31 March  2017

 

30 September 2017

 

30 September 2017

Group

ZMW'000s

 

USD'000s

 

ZMW'000s

 

USD'000s

 

ZMW'000s

 

USD'000s

Revenue

1,226,083

 

123,847

 

1,161,318

 

118,381

 

2,435,182

 

255,796

Profit before taxation

27,293

 

2,758

 

5,780

 

590

 

5,450

 

572

Taxation charge

(4,333)

 

(438)

 

(556)

 

(57)

 

(1,049)

 

(110)

Profit from discontinued operations

(11,290)

 

(1,140)

 

-

 

-

 

(1,133)

 

(119)

Group profit for the period

11,670

 

1,180

 

5,224

 

533

 

3,268

 

343

 

 

 

 

 

 

 

 

 

 

 

 

Group profit attributable to:

 

 

 

 

 

 

 

 

 

 

 

Equity holders of the parent

12,295

 

1,243

 

5,519

 

563

 

4,037

 

424

Non-controlling interest

(625)

 

(63)

 

(295)

 

(30)

 

(769)

 

(81)

 

11,670

 

1,180

 

5,224

 

533

 

3,268

 

343

 

5.             Dividends

There was no dividend paid or proposed for the six month period ended 31 March 2018.

 

6.             Management

                 The Senior Management team comprise the following:

 

Francis Grogan

Joint Chief Executive Officer

Carl Irwin

Joint Chief Executive Officer (Retired on March 31, 2018)

Timothy Pollock             

Group Managing Director (Joint Chief Executive Officer as of April 1, 2018. Resigned on 31 May 2018)

Walter Roodt

Deputy Managing Director

Craig Harris

Chief Financial Officer

Yusuf Koya

Executive Director

Danny Museteka

Company Secretary

Mike Lovett                      

General Manager Farming Division

Felix Lupindula

Corporate Affairs Manager

Pravin Abraham

Chief Internal Auditor

Ebrahim Israel

General Manager - International Retailing

Murray Moore

General Manager - Beef and Dairy

David Mynhardt

General Manager - Sinazongwe Farm

Robert Hoskins Davies

General Manager - Chiawa Farm

Francis Mondomona

General Manager - Huntley Farm

Richard Franklin

General Manager - Zamleather Limited

Harry Hayden-Payne

General Manager - Zampalm Limited

Webster Mapulanga

General Manager - Master Pork Limited

Theo de Lange

Group Technical Manager

Bartholomew Mbao

Dairy Processing Manager

Andries Van Rensburg

Piggery Manager

Johan Swanepoel

Flour Mill Manager

Charles Milupi

Poultry Manager

Ivor Chilufya

Group Financial Controller

Justin Rust

Commercial Manager

Basil Webber

Commercial Manager

Christiaan Engelbrecht

Commercial Manager

Niyaas Dalal

Finance Manager - Zambeef Products Limited, Zam Chick Limited

Rory Park

Finance Manager - Master Pork Limited, Zampalm Limited, Zamhatch Limited

Simon Nkhata

Finance Manager - Zambeef Retailing Limited

Baron Chisola

Financial Controller - Group Inventory

Shadreck Banda

Financial Controller - Group Suppliers

Samantha Dale

Group Head - Debtors and Credit Control

Anthony Seno

Head of IT

Guy Changole

Head of Human Resources

Mathews Mbasela

Head of Payroll Processing

EddieTembo

Chief Security Manager

Jones Kayawe

Head of Environment, Health and Safety

Field Musongole

Maintenance Manager

Justo Kopulande

CSR/PR Manager

Ernest Gondwe

Regional Manager - Shoprite & Excellent Meats

Francis Mulenga

Regional Manager - Shoprite

Noel Chola

Regional Manager - Shoprite

Rodgers Chinkuli

Regional Manager - Zambeef Outlets

Deon Conradie

Managing Director - Master Meats Nigeria

Hillary Anderson

National Retail Manager - Nigeria

Lufeyo Nkhoma

General Manager - Master Meats Ghana

Clement Mulenga

General Manager - Master Meats Nigeria

 

7.             Directors and Secretary

The directors in office during the financial period and at the date of this report were as follows:

 

Dr. Jacob Mwanza

Chairman

Dr. Lawrence S. Sikutwa

 

John Rabb

 

Yollard Kachinda

 

Prof. Enala Mwase

 

David Osborne

 

Tim Pollock                         

Group Managing Director/Joint Chief Executive Officer (appointed April 1, 2018 and resigned on 31 May 2018)

Francis Grogan

Joint Chief Executive Officer

Dr. Carl Irwin

Joint Chief Executive Officer (Retired on March 31, 2018)

Margaret Mudenda

 

Yusuf Koya

 

Danny Museteka

Company Secretary

 

8.             Directors' interests

The directors held the following interests in the Company's ordinary shares at the reporting date:

 

 

31 March 2018

 

30 September 2017

 

 

Direct

 

Indirect

 

Direct

 

Indirect

DR. Jacob Mwanza

1,100,000

 

-

 

1,100,100

 

-

Dr. Carl Irwin

3,763

 

5,406,445

 

3,763

 

5,406,445

Francis Grogan

995,000

 

3,591,631

 

995,000

 

3,591,631

John Rabb

-

 

14,000,000

 

-

 

14,000,000

Tim Pollock

100,000

 

-

 

-

 

-

Yusuf Koya

245,482

 

-

 

245,482

 

-

 

2,444,245

 

23,003,076

 

2,344,245

 

23,003,076

                 

 

9.             Directors' fees and remuneration

                               

 

 

ZMW'000

Salary

Bonus

Housing Allowance

Car Allowance

Air Fares Allowance

Medicals

Long Term Incentive Plan 2 (Shares)

NON-EXECUTIVE

 

 

 

 

 

 

 

Jacob Mwanza        

825,108

-

-

-

-

-

 

Lawrence Sikutwa

360,922

-

-

-

-

-

 

John Rabb

309,360

-

-

-

-

-

 

Yollard Kachinda

129,781

-

-

-

-

-

-

Enala Mwasa

129,309

-

-

-

-

-

-

Margaret Mudenda

129,309

-

-

-

-

-

-

Jonathan Kirby

52,389

-

-

-

-

-

-

EXECUTIVE

 

 

 

 

 

 

 

Francis Grogan

3,849,403

5,000

Company House

Company Car

460,800

Yes

6,250,000

Timothy Pollock

2,320,080

-

-

Company Car

289,600

Yes

-

Carl Irwin

1,618,442

5,000

-

Company Car

460,800

Yes

6,250,000

Yusuf Koya

3,461,651

5,000

-

-

384,000

Yes

275,000

Danny Museteka

2,434,854

318,600

-

-

384,000

Yes

275,000

 

In October 2016, the Board approved a retirement package for the Chairman, Dr. Jacob Mwanza of USD330,000. An advance of USD110,000 was paid about the same time, and the full payment will be paid towards the end of 2018.

 

In addition to the above, all Executive Directors are also entitled to a gratuity of 10 per cent. of their gross basic salary paid over the two-year contract term, less statutory deductions for tax.

 

The Long Term Incentive Plan 2 ("LTIP 2") has the following key terms/conditions:

a) Structure: market value option shares ("Options");

b) Exercise price: 15 pence;

c) Maximum shares: The annual award base value (number of shares multiplied by the share price on the date of grant plus number of Options multiplied by the exercise price) may not exceed three times the Executive's base salary; and

d) Vesting period: three years from 2015 to 2018; exercisable from 1 March 2018:

e) The Options can only be exercised if Zambeef achieves the following targets:

I. If the share price reaches 40 pence, then 25 per cent. of the Options become exercisable.

II. If the share price reaches 48 pence, a further 25 per cent. of the Options become exercisable.

III. If the share price reaches 56 pence, a further 25 per cent. of the Options become exercisable.

IV. If the share price reaches 65 pence, the final 25 per cent. of the Options become exercisable.

V. Zambeef achieving a debt-to-equity (gearing) ratio of less than 35 per cent. in the audited accounts immediately prior to exercising the options.

VI. Zambeef achieving a current ratio (current assets divided by current liabilities) of 1.5 in the audited annual accounts immediately prior to the exercising of the options.

VII. Zambeef generating free cash flow.

VIII. The Zambeef share price triggers set above will be considered achieved if in the 14 days immediately prior to exercising the Options, the shares have traded continuously at not less than these prices for 14 days.

IX. The Options will be exercisable at any time for 2 years after the 3-year period from the issue of the Options have lapsed.

X. The Options can only be exercised if the relevant executives are still employed by the Company.

 

10.           Significant Shareholdings

As at 31 March 2018, the Company has been advised of the following notifiable interests in its ordinary share capital:

 

Investor Name

 

Current Position

% of Shareholding

CDC Group Plc

52,601,435

17.5%

M & G Recovery Fund

46,304,408

12.16%

Africa Life

29,596,678

7.78%

National Pension Scheme Authority (Zambia)

24,979,819

6.56%

Sussex Trust

14,000,000

3.68%

               

              CDC Group Plc. holds 100,057,658 convertible redeemable preference shares.

 

 11.          Employees

The Group employed an average number of employees of 7,734 (30 September 2017 - 7,068; 31 March 2017 - 6,854) and total salaries and wages were ZMW197,954 million (USD20 million) for the six month period to 31 March 2018 (30 September 2017 - ZMW357 million [USD28.3 million], 31 March 2017 - ZMW173 million [USD17.7 million]). 

 

The average number of persons employed by the Group in each month of the 6 month period is as follows:

 

October 2017

7,481

November 2017

7,491

December 2017

7,823

January 2018

7,559

February 2018

7,863

March 2018

8,186

 

12.           Safety, Health and Environmental issues

As part of some of the Group's term loans, the Group signed up to an Environmental and Social Action Plan ("ESAP"), which requires the Group to meet both local Zambian standards as well as international standards relating to the environment.   

 

The Group provides healthcare services to its employees. The Group also supports various community activities in the areas that it operates from.

 

13.           Legal matters

There are no significant or material legal or arbitration proceedings (including to the knowledge of the Directors, any such proceedings which are pending or threatened, by or against the Company or any subsidiary of the Group) which may have or have had during the 12 months immediately preceding the date of this document a significant or material effect on the financial position or profitability of the Company or any member of the Group.

 

14.           Gifts and donations

The Group made donations of ZMW1.5 million (USD0.15 million), (30 September 2017 - ZMW2 million [USD0.2 million], 31 March 2017 - ZMW1.23 million [USD0.13 million]) to a number of activities.

 

15.           Export sales

The Group made exports of ZMW27 million (USD2.8 million) during the period (30 September 2017 - ZMW24.5 million [USD2.6 million], 31 March 2017 - ZMW14 million [USD1.4 million]).

 

16.           Property, plant and equipment

Assets totalling ZMW80.3 million (USD8.1 million) were purchased by the Group during the period (30 September 2017 - ZMW209.4 million [USD22 million], 31 March 2017 - ZMW126.5 million [USD12.9 million]) which included expenditure on the palm plantation development during the period of ZMW6 million (USD0.6 million) (30 September 2017 - ZMW13.8 million [USD1.5 million], 31 March 2017 - ZMW8.8 million [USD0.9 million]).

 

17.           Interim report

                The interim report set out below has been approved by the directors.

 

 

By order of the Board

 

Company Secretary

 

Date: 5 June 2018

 

 

6 June 2018

 

The Directors

Zambeef Products PLC

Plot 4970, Manda Road

Industrial Area

Lusaka

 

Dear Sirs

 

INDEPENDENT REVIEW REPORT OF ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

 

Introduction

We have been instructed by the Directors of the Company to review the financial information set out on pages 19 to 50 and we have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information.

 

Directors' responsibilities

The interim report, including the financial information contained therein, is the responsibility of, and has been approved by the Directors.  The Listing Rules of the Lusaka Stock Exchange and International Accounting Standard 34 require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual financial statements except where changes, and reasons for them, are disclosed.

 

Review of work performed

We conducted our review in accordance with guidance contained in the International Standards on Auditing. A review consists principally of making enquiry of Group management and applying analytical procedures to the financial information and underlying financial data and based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed.  A review excludes audit procedures such as test of controls and verification of assets, liabilities and transactions.  It is substantially less in scope than an audit performed in accordance with International Standards on Auditing and therefore provides a lower level of assurance than an audit.  Accordingly, we do not express an audit opinion on the financial information.

 

Review conclusion

On basis of our review we are not aware of any material modifications that should be made to the consolidated financial information as presented for the six month period ended 31 March 2018.

 

Chartered Accountants

 

Christopher Mulenga (AUD/ F000178)

Name of Partner signing on behalf of the Firm

 

Lusaka

 

Date: 5 June 2018

 

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTH PERIOD ENDED 31 MARCH 2018

 

 

 

Unaudited

Audited

 

 

31 Mar 2018

31 Mar 2017

30 Sept 2017

Group

Notes

ZMW'000s

ZMW'000s

ZMW'000s

 

 

 

 

 

Revenue

5(i)

1,226,083

1,161,318

2,435,182

Net gain/ (loss) arising from price changes in fair value of biological assets

8

(4,283)

(91)

(3,491)

Cost of sales

 

(760,648)

(783,603)

(1,633,060)

Gross profit

5(i)

461,152

377,624

798,631

Administrative expenses

 

(399,546)

(334,707)

(714,746)

Other income

 

731

1,243

2,768

Operating profit

 

62,337

44,160

86,653

Exchange losses on translating foreign currency transactions and balances

 

5,619

6,748

6,701

Finance costs

 

(40,663)

(45,128)

(87,904)

Profit before taxation

5(i)

27,293

5,780

5,450

Taxation charge

6(a)

(4,333)

(556)

(1,049)

Group profit for the period from continued operations

 

22,960

5,224

4,401

Loss from discontinued operations

14

(11,290)

-

(1,133)

Total profit/(loss) for the period

 

11,670

5,224

3,268

 

 

 

 

 

Group profit/(loss) attributable to:

 

 

 

 

Equity holders of the parent

 

12,295

5,519

4,037

Non-controlling interest

 

(625)

(295)

(769)

 

 

11,670

5,224

3,268

Other comprehensive income

 

 

 

 

Exchange gains on translating presentational currency

 

(10,437)

(10,547)

(31,190)

Total comprehensive income for the period

 

1,233

(5,323)

(27,922)

 

 

 

 

 

Total comprehensive income/(loss) for the period attributable to:

 

 

 

 

Equity holders of the parent

 

4,299

(4,308)

(27,257)

Non-controlling interest

 

(3,066)

(1,015)

(665)

 

 

1,233

(5,323)

(27,922)

Earnings per share

 

Ngwee

Ngwee

Ngwee

Basic and diluted earnings per share from continued operations

7

7.85

1.84

1.72

Basic and diluted earnings per share from discontinued operations

7

(3.76)

-

(0.38)

Total

7

4.09

1.84

1.34

 

 

The accompanying notes form part of the financial statements.

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTH PERIOD ENDED 31 MARCH 2018

 

 

 

Unaudited

Audited

 

 

31 Mar 2018

31 Mar 2017

30 Sept 2017

Group

Notes

USD'000s

USD'000s

USD'000s

Revenue

5(ii)

123,847

118,381

255,796

Net gain /(loss) arising from price changes in fair value of biological assets

8

(433)

(9)

(367)

Cost of sales

 

(76,833)

(79,878)

(171,540)

Gross profit

5(ii)

46,581

38,494

83,889

Administrative expenses

 

(40,358)

(34,119)

(75,078)

Other income

 

74

127

291

Operating profit

 

6,297

4,502

9,102

Exchange losses on translating foreign currency transactions and balances

 

568

688

704

Finance costs

 

(4,107)

(4,600)

(9,234)

Profit before taxation

5(ii)

2,758

590

572

Taxation charge

6(f)

(438)

(57)

(110)

Group profit for the period from continued operations

 

2,320

533

462

Loss from discontinued operations

14

(1,140)

-

(119)

Total profit/(loss) for the period

 

1,180

533

343

 

 

 

 

 

Group profit/(loss) attributable to:

 

 

 

 

Equity holders of the parent

 

1,243

563

424

Non-controlling interest

 

(63)

(30)

(81)

 

 

1,180

533

343

Other comprehensive income

 

 

 

 

Exchange losses on translating presentational currency

 

4,938

6,617

4,243

Total comprehensive income for the period

 

6,118

7,150

4,586

 

 

 

 

 

Total comprehensive income/(loss) for the period attributable to:

 

 

 

 

Equity holders of the parent

 

6,459

7,282

4,681

Non-controlling interest

 

(341)

(132)

(95)

 

 

6,118

7,150

4,586

 

 

 

 

 

Earnings per share

 

Cents

Cents

Cents

Basic and diluted earnings per share from continued operations

7

0.79

0.19

0.18

Basic and diluted earnings per share from discontinued operations

7

(0.38)

-

(0.04)

Total

7

0.41

0.19

0.14

 

The accompanying notes form part of the financial statements.

 

 

 

CONSOLIDATED STATEMENT OF MOVEMENTS IN EQUITY

FOR THE SIX MONTH PERIOD ENDED 31 MARCH 2018

 

 

Share capital

 

Share premium

 

Preference share capital

Revaluation reserve

 

Foreign exchange

translation reserve

 

Retained earnings

 

Total attributable to owners of the parent

 

Non-controlling interest

 

Total equity

 

ZMW'000s

 

ZMW'000s

 

ZMW'000s

ZMW'000s

 

ZMW'000s

 

ZMW'000s

 

ZMW'000s

 

ZMW'000s

 

ZMW'000s

At 1 October 2016

3,006

 

1,125,012

 

1,000

485,765

 

103,521

 

417,635

 

2,135,939

 

(7,616)

 

2,128,323

Profit for the period

-

 

-

 

-

-

 

-

 

5,519

 

5,519

 

(295)

 

5,224

Transfer of surplus depreciation

-

 

-

 

-

(9,318)

 

-

 

9,318

 

-

 

-

 

-

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exchange gains on translating presentational currency

-

 

-

 

-

-

 

(9,827)

 

-

 

(9,827)

 

(720)

 

(10,547)

Total comprehensive income for the period

-

 

-

 

-

(9,318)

 

(9,827)

 

14,837

 

(4,308)

 

(1,015)

 

(5,323)

At 31 March 2017

3,006

 

1,125,012

 

1,000

476,447

 

93,694

 

432,472

 

2,131,631

 

(8,631)

 

2,123,000

Profit for the period

-

 

-

 

-

-

 

-

 

(1,482)

 

(1,482)

 

(474)

 

(1,956)

Transfer of surplus depreciation

-

 

-

 

-

(14,100)

 

 

 

14,100

 

-

 

-

 

-

Revaluation

-

 

-

 

-

789,795

 

-

 

-

 

789,795

 

-

 

789,795

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

 

Exchange gains/(losses) on translating presentational currency

-

 

-

 

-

-

 

(21,467)

 

-

 

(21,467)

 

824

 

(20,643)

Total comprehensive income for the period

-

 

-

 

-

775,695

 

(21,467)

 

12,618

 

766,846

 

350

 

767,196

At 30 September 2017

3,006

 

1,125,012

 

1,000

1,252,142

 

72,227

 

445,090

 

2,898,477

 

(8,281)

 

2,890,196

Profit for the period

-

 

-

 

-

-

 

-

 

12,295

 

12,295

 

(625)

 

11,670

Transfer of surplus depreciation

-

 

-

 

-

(11,700)

 

-

 

11,700

 

-

 

-

 

-

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exchange gains on translating presentational currency

-

 

-

 

-

-

 

(7,996)

 

-

 

(7,996)

 

(2,441)

 

(10,437)

Total comprehensive income for the period

-

 

-

 

-

(11,700)

 

(7,996)

 

23,995

 

4,299

 

(3,066)

 

1,233

At 31 March 2018

3,006

 

1,125,012

 

1,000

1,240,442

 

64,231

 

469,085

 

2,902,776

 

(11,347)

 

2,891,429

                                             

                                                                                                            

CONSOLIDATED STATEMENT OF MOVEMENTS IN EQUITY

FOR THE SIX MONTH PERIOD ENDED 31 MARCH 2018

 

 

Share capital

 

Share premium

 

Preference share capital

Revaluation reserve

 

Foreign exchange

translation reserve

 

Retained earnings

 

Total attributable to owners of the parent

 

Non-controlling Interest

 

Total equity

 

 

USD'000s

 

USD'000s

 

USD'000s

USD'000s

 

USD'000s

 

USD'000s

 

USD'000s

 

USD'000s

 

USD'000s

 

At 1 October 2016

449

 

185,095

 

100

98,763

 

(144,899)

 

73,876

 

213,384

 

(761)

 

212,623

 

Profit for the period

-

 

-

 

-

-

 

-

 

563

 

563

 

(30)

 

533

 

Transfer of surplus depreciation

-

 

-

 

-

(950)

 

-

 

950

 

-

 

-

 

-

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exchange losses on translating presentational currency

-

 

-

 

-

-

 

6,719

 

-

 

6,719

 

(102)

 

6,617

 

Total comprehensive income for the period

-

 

-

 

-

(950)

 

6,719

 

1,513

 

7,282

 

(132)

 

7,150

 

At 31 March 2017

449

 

185,095

 

100

97,813

 

(138,180)

 

75,389

 

220,666

 

(893)

 

219,773

 

Transactions with owners

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit for the period

-

 

-

 

-

-

 

-

 

(139)

 

(139)

 

(51)

 

(190)

 

Transfer of surplus depreciation

-

 

-

 

-

(1,510)

 

-

 

1,510

 

-

 

-

 

-

 

Revaluation

-

 

-

 

-

81,675

 

-

 

-

 

81,675

 

-

 

81,675

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exchange losses on translating presentational currency

-

 

-

 

-

-

 

(2,462)

 

-

 

(2,462)

 

88

 

(2,374)

 

Total comprehensive income for the period

-

 

-

 

-

80,165

 

(2,462)

 

1,371

 

79,074

 

37

 

79,111

 

At 30 September 2017

449

 

185,095

 

100

177,978

 

(140,642)

 

76,760

 

299,740

 

(856)

 

298,884

 

Profit for the period

-

 

-

 

-

-

 

-

 

1,243

 

1,243

 

(63)

 

1,180

 

Transfer of surplus depreciation

-

 

-

 

-

(1,182)

 

-

 

1,182

 

-

 

-

 

-

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exchange losses on translating presentational currency

-

 

-

 

-

-

 

5,216

 

-

 

5,216

 

(278)

 

4,938

 

Total comprehensive income

-

 

-

 

-

(1,182)

 

5,216

 

2,425

 

6,459

 

(341)

 

6,118

At 31 March 2018

449

 

185,095

 

100

176,796

 

(135,426)

 

79,185

 

306,199

 

(1,197)

 

305,002

 

 

 CONSOLIDATED STATEMENT OF FINANCIAL POSITION ‑ 31 MARCH 2018

 

 

Unaudited

 

Audited

 

Notes

31 Mar 2018

 

31 Mar 2017

 

30 Sept 2017

 

 

ZMW'000s

 

ZMW'000s

 

ZMW'000s

ASSETS

 

 

 

 

 

 

Non - current assets

 

 

 

 

 

 

Goodwill

 

166,801

 

166,801

 

166,801

Property, plant and equipment

 

2,614,680

 

1,837,941

 

2,610,488

Plantation development expenditure

 

-

 

100,277

 

-

Biological assets

8

-

 

51,541

 

-

Deferred tax assets

6(e)

43,176

 

41,013

 

43,368

 

 

2,824,657

 

2,197,573

 

2,820,657

Current assets

 

 

 

 

 

 

Biological assets

8

339,358

 

373,280

 

167,857

Inventories

 

476,843

 

372,975

 

516,418

Trade and other receivables

 

116,269

 

131,497

 

90,792

Assets held for disposal

14

239,937

 

-

 

221,178

Amounts due from related companies

 

18,789

 

2,727

 

11,422

Income tax recoverable

6(c)

8,719

 

1,569

 

1,376

 

 

1,199,915

 

882,048

 

1,009,043

Total assets

 

4,024,572

 

3,079,621

 

3,829,700

EQUITY AND LIABILITIES

 

 

 

 

 

 

Capital and reserves

 

 

 

 

 

 

Share capital

 

3,006

 

3,006

 

3,006

Preference share capital

 

1,000

 

1,000

 

1,000

Share premium

 

1,125,012

 

1,125,012

 

1,125,012

Reserves

 

1,773,758

 

1,002,613

 

1,769,459

 

 

2,902,776

 

2,131,631

 

2,898,477

Non-controlling interest

 

(11,347)

 

(8,631)

 

(8,281)

 

 

2,891,429

 

2,123,000

 

2,890,196

Non - current liabilities

 

 

 

 

 

 

Interest bearing liabilities

10

284,352

 

233,589

 

328,238

Obligations under finance leases

 

24,382

 

33,433

 

27,915

Amounts due to related companies

 

-

 

-

 

-

Deferred liability

 

17,729

 

11,037

 

16,756

Deferred taxation

6(e)

7,318

 

8,630

 

7,212

 

 

333,781

 

286,689

 

380,121

Current liabilities

 

 

 

 

 

 

Interest bearing liabilities

10

73,416

 

77,306

 

78,080

Collateral management agreement

10

136,774

 

68,008

 

60,248

Obligations under finance leases

 

12,679

 

22,422

 

19,916

Trade and other payables

 

284,165

 

238,757

 

291,843

Assets held for disposal

14

12,092

 

-

 

1,079

Amounts due to related companies

 

131

 

-

 

81

Taxation payable

6(c)

8,617

 

12,046

 

2,988

Cash and cash equivalents

9

271,488

 

251,393

 

105,148

 

 

799,362

 

669,932

 

559,383

Total equity and liabilities

 

4,024,572

 

3,079,621

 

3,829,700

The accompanying notes form part of the financial statements. The interim financial statements on pages 19 to 50 were approved by the Board of Directors on 6 June 2018 and were signed on its behalf by

                                                                                )

                                                                                )  DIRECTORS                                                   

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION ‑ 31 MARCH 2018

 

 

Unaudited

 

Audited

 

 

31 Mar 2018

 

31 Mar 2017

 

30 Sept 2017

 

Notes

USD '000s

 

USD '000s

 

USD '000s

ASSETS

 

 

 

 

 

 

Non - current assets

 

 

 

 

 

 

Goodwill

 

17,595

 

17,267

 

17,249

Property, plant and equipment

 

275,810

 

190,263

 

269,958

Plantation development expenditure

 

-

 

10,381

 

-

Biological assets

8

-

 

5,336

 

-

Deferred tax asset

6(j)

4,554

 

4,246

 

4,485

 

 

297,959

 

227,493

 

291,692

Current assets 

 

 

 

 

 

 

Biological assets

8

35,797

 

38,642

 

17,359

Inventories

 

50,300

 

38,610

 

53,404

Trade and other receivables

 

12,265

 

13,613

 

9,390

Assets held for disposal

 

25,309

 

 

 

22872

Amounts due from related companies

 

1,982

 

282

 

1,181

Income tax recoverable

6(h)

920

 

162

 

142

 

 

126,573

 

91,309

 

104,348

Total assets

 

424,532

 

318,802

 

396,040

EQUITY AND LIABILITIES

 

 

 

 

 

 

Capital and reserves

 

 

 

 

 

 

Share capital

 

449

 

449

 

449

Preference share capital

 

100

 

100

 

100

Share premium

 

185,095

 

185,095

 

185,095

Reserves

 

120,555

 

35,022

 

114,096

 

 

306,199

 

220,666

 

299,740

Non-controlling interest

 

(1,197)

 

(893)

 

(856)

 

 

305,002

 

219,773

 

298,884

Non - current liabilities

 

 

 

 

 

 

Interest bearing liabilities

10

29,995

 

24,181

 

33,944

Obligations under finance leases

 

2,572

 

3,461

 

2,887

Deferred liability

 

1,870

 

1,143

 

1,733

Deferred tax liability

6(j)

772

 

893

 

746

 

 

35,209

 

29,678

 

39,310

Current liabilities

 

 

 

 

 

 

Interest bearing liabilities

10

7,744

 

8,003

 

8,074

Collateral management agreement

10

14,428

 

7,040

 

6,230

Obligations under finance leases

 

1,337

 

2,321

 

2,060

Trade and other payables

 

29,975

 

24,716

 

30,179

Assets held for disposal

14

1,276

 

 

 

111

Amounts due to related companies

 

14

 

-

 

9

Taxation payable

6(h)

909

 

1,247

 

309

Cash and cash equivalents

9

28,638

 

26,024

 

10,874

 

 

84,321

 

69,351

 

57,846

Total equity and liabilities

 

424,532

 

318,802

 

396,040

The accompanying notes form part of the financial statements. The interim financial statements on pages 19 to 50 were approved by the Board of Directors on 6 June 2018 and were signed on its behalf by

                                                                                )

                                                                                ) DIRECTORS

 

 

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTH PERIOD ENDED 31 MARCH 2018

 

Unaudited

 

Audited

 

 

6 months to

 

6 months to

 

Year to

 

31 Mar 2018

 

31 Mar 2017

 

30 Sept 2017

 

ZMW'000s

 

ZMW'000s

 

ZMW'000s

Cash (outflow)/inflow (on)/from operating activities

 

 

 

 

 

Profit before taxation

27,293

 

5,780

 

5,450

Finance costs

40,663

 

45,128

 

87,904

Profit on disposal of property, plant and equipment

(1,358)

 

-

 

(974)

Depreciation

51,474

 

40,810

 

83,301

Profit/(loss) on discontinued operations

(11,290)

 

-

 

(1,133)

Fair value price adjustment

4,283

 

91

 

3,491

Net unrealised foreign exchange (gains)/losses

(1,394)

 

(4,525)

 

(4,410)

Earnings before interest, tax, depreciation and amortisation

109,671

 

87,284

 

173,629

Increase in biological assets

(171,501)

 

(189,315)

 

19,169

Decrease in inventory

39,575 

 

171,764

 

28,321

Decrease /(increase) in trade and other receivables

(25,477)

 

(18,346)

 

22,503

Decrease in amount due from related companies

(7,367)

 

7,816

 

(1,158)

(Decrease)/increase in trade and other payables

(7,678)

 

(83,378)

 

(33,308)

Increase in amount due to related companies

50

 

(313)

 

4,113

Increase in deferred liability

973

 

595

 

6,314

Cash outflow from assets held for disposal

(7,746)

 

-

 

(14,226)

Income tax paid

(5,749)

 

(4,368)

 

(17,329)

Net cash (outflow)/inflow (on)/from operating activities

(75,249)

 

(28,261)

 

188,028

 

 

 

 

 

 

Investing activities

 

 

 

 

 

Purchase of property, plant and equipment

(74,257)

 

(117,613)

 

(195,610)

Expenditure on plantation development

-

 

(8,848)

 

(13,805)

Movement in investments

-

 

(8,879)

 

(8,879)

Proceeds from sale of assets

19,949

 

-

 

-

Net cash (outflow)/ inflow (on)/ from investing activities

(54,308)

 

(135,340)

 

(218,294)

Net cash (outflow)/ inflow before financing

(129,557) 

 

(163,601)

 

(30,266)

 

 

 

 

 

 

Financing  

 

 

 

 

 

Long term loans repaid

(48,550)

 

(57,096)

 

(104,768)

Receipt of long term loans

-

 

-

 

140,100

(Repayment)/ receipt of short term funding

76,526

 

(47,410)

 

(55,292)

Lease finance (repaid)/ obtained

(10,770)

 

4,965

 

(3,551)

Finance costs including discontinued operations

(40,663)

 

(45,128)

 

(87,904)

Net cash outflow from financing

(23,457)

 

(144,669)

 

(111,415)

Decrease in cash and cash equivalents

(153,014)

 

(308,270)

 

(141,681)

Cash and cash equivalents at beginning of year

(105,148)

 

64,806

 

64,806

Effects of exchange rate changes on the balance of

 

 

 

 

 

cash held in foreign currencies

(13,326)

 

(7,929)

 

(28,273)

Cash and cash equivalents at end of year

(271,488)

 

(251,393)

 

(105,148)

Represented by:

 

 

 

 

 

Cash in hand and at bank

(61,857)

 

56,416

 

62,518

Bank overdrafts

(333,345)

 

(307,809)

 

(167,666)

 

(271,488)

 

(251,393)

 

(105,148)

               
 

 

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTH PERIOD ENDED 31 MARCH 2018

 

Unaudited

 

Audited

 

6 months to

 

6 months to

 

Year to

 

31 Mar 2018

 

31 Mar 2017

 

30 Sept 2017

 

USD'000s

 

USD'000s

 

USD'000s

Cash (outflow)/inflow (on)/from operating activities

 

 

 

 

 

Loss before taxation

2,758

 

590

 

572

Finance costs

4,107

 

4,600

 

9,234

Profit on disposal of property, plant and equipment

(137)

 

-

 

(102)

Depreciation

5,199

 

4,160

 

8,750

Profit/(loss) on discontinued operations

(1,107)

 

-

 

(119)

Fair value price adjustment

433

 

9

 

367

Net unrealised foreign (gains)/ exchange losses

(141)

 

(461)

 

(463)

Earnings before interest, tax, depreciation and amortisation

11,112

 

8,898

 

18,239

Increase in biological assets

(18,438)

 

(19,298)

 

2,014

Decrease in inventory

3,104

 

17,509

 

2,975

Decrease /(increase) in trade and other receivables

(2,875)

 

(1,870)

 

2,363

Decrease in amount due from related companies

(801)

 

797

 

(122)

(Decrease)/ increase in trade and other payables

(204)

 

(8,499)

 

(3,499)

Increase in amount due to related companies

5

 

(32)

 

432

Increase in deferred liability

137

 

61

 

663

Cash outflow from assets held for disposal

(1,272)

 

-

 

(1,494)

Income tax paid

(581)

 

(445)

 

(1,820)

Net cash (outflow)/inflow (on)/from operating activities

(9,813)

 

(2,879)

 

19,751

 

 

 

 

 

 

Investing activities

 

 

 

 

 

Purchase of property, plant and equipment

(7,501)

 

(11,989)

 

(20,547)

Expenditure on plantation development

-

 

(902)

 

(1,450)

Movement in investments

-

 

(905)

 

(933)

Proceeds from sale of assets

2,098

 

-

 

-

Net cash outflow on investing activities

(5,403)

 

(13,796)

 

(22,930)

Net cash outflow before financing

(15,216)

 

(16,675)

 

(3,179)

Financing  

 

 

 

 

 

Long term loans repaid

(4,279)

 

(5,820)

 

(11,005)

Receipt of long term loans

-

 

-

 

15,000

(Repayment)/ receipt of short term funding

8,198

 

(4,833)

 

(5,808)

Lease finance

(1,038)

 

506

 

(373)

Finance costs including discontinued operations

(4,107)

 

(4,600)

 

(9,234)

Net cash outflow from financing

(1,226)

 

(14,747)

 

(11,420)

Decrease in cash and cash equivalents

(16,442)

 

(31,422)

 

(14,599)

Cash and cash equivalents at beginning of year

(10,874)

 

6,474

 

6,474

Effects of exchange rate changes on the balance of

 

 

 

 

 

  cash held in foreign currencies

(1,322)

 

(1,076)

 

(2,749)

Cash and cash equivalents at end of year

(28,638)

 

(26,024)

 

(10,874)

Represented by:

 

 

 

 

 

Cash in hand and at bank

6,525

 

5,840

 

6,465

Bank overdrafts

(35,163)

 

(31,864)

 

(17,339)

 

(28,638)

 

(26,024)

 

(10,874)

 

 

 

 

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS ‑ 31 MARCH 2018

 

1.             The Group

Zambeef Products PLC and its subsidiaries ("Group") is one of the largest agri-businesses in Zambia. The Group is principally involved in the production, processing, distribution and retailing of beef, chicken, pork, milk, dairy products, eggs, edible oils, stock feed and flour. The Group also has large row cropping operations (principally maize, soya beans and wheat), with approximately 7,787 Ha of irrigated row crops and 8,694 Ha of rain-fed/dry-land crops available for planting each year. The Group is also in the process of rolling out its West Africa expansion in Nigeria and Ghana, as well as a palm project within Zambia.

 

2.             Principal accounting policies

The principal accounting policies applied by the Group in the preparation of these financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

 

(a)            Basis of consolidation

The consolidated financial statements include the financial statements of the parent Company and its subsidiary companies made up to the end of the financial year.  The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of comprehensive income from the date of their acquisition or up to the date of their disposal.  Intercompany transactions and profits are eliminated on consolidation and all income and profit figures relate to external transactions only.

 

Non-controlling interests, presented as part of equity, represent the portion of a subsidiary's profit or loss and net assets that is not held by the Group.  The Group attributes total comprehensive income or loss of subsidiaries between the owners of the parent and the non-controlling interests based on their respective ownership interests.  Losses incurred are allocated to the non-controlling interest in equity until this value is nil, at which point any subsequent losses are allocated against the interests of the parent.

 

(b)           Going Concern

At the reporting date the current portion of long term loan amounts repayable amount to ZMW222.9 million (USD23.5million) [30 September 2017: ZMW158.2 million (USD16.4 million)]. After reviewing the available information including the Group's strategic plans and continuing support from the Group's working capital funders, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements. All current liabilities will be settled from the continued liquidation of stock and expected increase in income from the capital expenditure carried out.

               

(c)            Basis of presentation

 

The information for the 6 months period ended 31 March 2018 and 31 March 2017 do not constitute statutory accounts.  The figures for the year ended 30 September 2017 have been extracted from the 2017 statutory financial statements. The auditors' report on those financial statements was unqualified.

 

The financial statements are prepared in accordance with the provisions of the Companies Act and International Financial Reporting Standards (IFRS).  The financial statements are presented in accordance with IAS 1 "Preparation of financial statements" (Revised 2007). The Group has elected to present the "Statement of Comprehensive income" in one statement namely the "Statement of Comprehensive Income".

 

The financial statements have been prepared under the historic cost convention, as modified by the revaluation of property, plant and equipment, and financial assets and liabilities at fair value through profit or loss.

 

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 3.

 

               

(d)           Foreign currencies

 

          (i)           Presentational and functional currency

Zambeef Products PLC as a company has ten operating branches of which nine have a historical functional currency of Zambian Kwacha (ZMW) and one (the Mpongwe Farm Branch) has a functional currency of United States Dollars (USD) being an operational branch set up during the financial year ended 30 September 2012. Management have chosen a variant on the functional currency of Mpongwe due to the following factors:

·   the majority of farm input costs (fertilizer, farming chemicals, agricultural machinery spares, etc.), which are primarily sourced from overseas, are driven by USD to ZMW exchange rate due to original prices being USD;

·    the pricing of Mpongwe's principal outputs (wheat, soya and maize) are significantly influenced by world USD denominated grain prices;

·      the capital raised attached to the acquisition of the Mpongwe assets was denominated in foreign currency;

·      the Mpongwe assets were purchased in USD;

·    upon admission and dual listing on the AIM market of the London Stock Exchange (LSE), Zambeef was  required to report in USD in addition to reporting in ZMW for the LuSE listing; and

·    majority of financial liabilities associated with working capital funding and capital expenditure are sourced in USD and repayable in USD, with a substantial portion of the Company's term liabilities secured on the assets of Mpongwe.

 

In light of this, Mpongwe's assets and liabilities are translated to ZMW and consolidated with other branches of the Company for reporting and tax purposes in Zambia, with any differences arising out of translation posted as a capital reserve item and a non-distributable reserve.

 

The Group's reporting currency in Zambia is ZMW and the presentation of financial statements to Non-Zambian shareholders and for the purposes of being listed on the AIM market of the London Stock Exchange also necessitate the presentation of the financial statements in United States Dollars (USD).

 

(ii)           Basis of translating presentational currency to USD for the purposes of supplementary information

              Statement of comprehensive income items have been translated using the average exchange rate for the period as an approximation to the actual exchange rate.  Assets and liabilities have been translated using the closing exchange rate. Any differences arising from this process have been recognised in other comprehensive income and accumulated in the foreign exchange reserve in equity.

 

Equity items have been translated at the closing exchange rate.  Exchange differences arising on retranslating equity items and opening net assets have also been transferred to the foreign exchange reserve within equity.

 

The following exchange rates have been applied:

 

ZMW:USD                                                                             Average                              Closing

                                                                                       exchange rate                   exchange rate

 

6 months ended 31 March 2017                                                   9.81                                  9.66

Year ended 30 September 2017                                                    9.52                                  9.67

6 months ended 31 March 2018                                                   9.90                                  9.48

 

All historical financial information, except where specifically stated, is presented in Zambian Kwacha rounded to the nearest ZMW'000s and United States Dollars rounded to the nearest USD'000s.

 

                (iii)          Basis of translating transactions and balances

Foreign currency transactions are translated into the functional currency using the rates of exchange prevailing at the date of transactions.  Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the statement of comprehensive income.

 

Non-operating foreign exchange gains and losses mainly arise on fluctuations of the exchange rate between United States Dollars and Zambian Kwacha.  Due to the instability of the exchange rate, which may result in significant variances of foreign exchange related assets and liabilities, these gains and losses have been presented below operating profit in the statement of comprehensive income.

 

(iv)          Basis of translating foreign operations

In the consolidated financial statements, the financial statements of the foreign subsidiaries originally presented in their local currency have been translated into Zambian Kwacha.  Assets and liabilities have been translated into Zambian Kwacha at the exchange rates ruling at the period end. Statement of comprehensive income items have been translated at an average monthly rate for the period.  Any differences arising from this procedure are taken to the foreign exchange reserve.

 

The following exchange rates have been applied:

 

ZMW: Nigeria Naira

Average

exchange rate

Closing

exchange rate

6 months ended 31 March 2017

31.74

32.32

Year ended 30 September 2017

36.55

36.79

6 months ended 31 March 2018

36.09

37.66

 

 

 

ZMW: Ghana Cedi

Average

exchange rate

Closing

exchange rate

6 months ended 31 March 2017

0.44

0.44

Year ended 30 September 2017

0.36

0.40

6 months ended 31 March 2018

0.45

0.47

 

 

(e)            General information and basis of preparation

The condensed interim consolidated financial statements are for the six months ended 31 March 2018 and are presented in Zambian Kwacha and United States Dollars.  They have been prepared in accordance with IAS 34 Interim Financial Reporting.  They do not include all of the information required in annual financial statements in accordance with IFRS and should be read in conjunction with the consolidated financial statements of the Group for the year ended 30 September 2017.

 

(f)            Significant accounting policies

The interim financial statements have been prepared in accordance with the accounting policies adopted in the Group's last annual financial statements for the year ended 30 September 2017.

 

3.             Critical accounting estimates and judgements

The Group makes estimates and assumptions that affect the reported amounts of assets and liabilities within the next financial year. Estimates and judgements are continually evaluated and based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

 

In the process of applying the Group's accounting policies, management has made judgements in determining:

(a)           the classification of financial assets;

(b)           whether assets are impaired;

(c)           estimation of provision and accruals;

(d)           recoverability of trade and other receivables; and

               (e)           valuation of biological assets and inventory.

 

4.             Significant events and transactions

The Group's management believes that the Group is well positioned in an improving economy. Factors contributing to the Group's strong position are:

 

(a)            Growth in the Zambian economy leading to higher disposable incomes.

(b)           Increase in the retail foot print of the Group.

(c)            Increase in production facilities of the Group leading to higher volumes available for retail.

(d)          Improvements in the management team across various areas of the Group leading to positive reinforcement of strong   operational synergies.

 

Overall, the Group is in a strong position and has sufficient capital and liquidity to service its operating activities and debt. The Group's objectives and policies for managing capital credit risk and liquidity risk should be read in conjunction with the consolidated financial statements of the Group for the year ended 30 September 2017.

 

5.             Segmental reporting

An operating segment is a distinguishable component of the Group that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the Group's Board of Directors ('BoD') to make decisions about the allocation of resources and assessment of performance about which discrete financial information is available.  Gross margin information is sufficient for the BoD to use for such purposes.  The BoD reviews information regarding the operating divisions which match the main external revenues earned by the Group, and management information regarding the operating assets and liabilities of the main business divisions within the Group.

 

                During the six month period to 31 March 2018, there have been no changes from prior periods in the measurement methods used to determine operating segments and reported segment profit or loss.

 

                The revenues and gross profit generated by each of the Group's operating segments and segment assets are summarised as follows:

 

                Period ended 31 March 2018

                (i)            in Zambian Kwacha

 

Segment

Revenue

Gross Profit

 

ZMW'000s

ZMW'000s

Retailing - Zambia

774,680

91,331

Master Meats (Nigeria)

49,410

9,165

Master Meats (Ghana)

16,289

5,116

Retailing West Africa

65,699

14,281

Total Retailing

840,379

105,612

 

 

 

Beef

233,937

63,402

Chicken

167,865

57,377

Pork

115,236

16,234

Milk and dairy

90,659

28,784

Fish

26,505

5,714

Eggs

31,041

7,982

Total Cold Chain Food Production

665,243

179,493

 

 

 

Stock Feed

307,598

82,809

Crops - row crops

110,356

78,791

 

 

 

Mill and bakery

48,635

9,161

Leather and shoe

17,281

5,286

Edible oils

-

-

Total Other

65,916

14,447

Total

1,989,492

461,152

Less: intra/inter group Sales

(763,409)

 

Group total

1,226,083

461,152

 

 

 

Central operating costs

 

(398,815)

Operating profit

 

62,337

Foreign exchange gains

 

5,619

Finance costs

 

(40,663)

Profit before tax

 

27,293

 

 

Operating assets/(liabilities)

 

 

 

 

 

 

Zambeef

Retailing

Master Pork

Other

Total

 

ZMW'000s

ZMW'000s

ZMW'000s

ZMW'000s

ZMW'000s

Property, plant and equipment

1,893,247

189,483

86,541

445,412

2,614,680

Biological assets and inventories

581,047

56,883

25,114

153,157

816,201

Cash, cash equivalents and bank overdrafts

(181,614)

(103,769)

(696)

14,591

(271,488)

 

 

 

                Period ended 31 March 2018

                (ii)           in US Dollars

 

Segment

Revenue

Gross Profit

 

USD '000s

USD '000s

Retailing - Zambia

78,251

9,225

Master Meats (Nigeria)

4,991

926

Master Meats (Ghana)

1,645

517

Retailing West Africa

6,636

1,443

Total Retailing

84,887

10,668

 

 

 

Beef

23,630

6,404

Chicken

16,956

5,796

Pork

11,640

1,640

Milk and dairy

9,157

2,907

Fish

2,677

577

Eggs

3,135

806

Total Cold Chain Food Production

67,195

18,130

 

 

 

Stock Feed

31,071

8,365

Crops - row crops

11,147

7,959

 

 

 

Mill and bakery

4,913

925

Leather and shoe

1,746

534

Edible oils

-

-

Total Other

6,659

1,459

Total

200,959

46,581

Less: intra/inter group sales

(77,112)

 

Group total

123,847

46,581

 

 

 

Central operating costs

 

(40,284)

Operating profit

 

6,297

Foreign exchange gains

 

568

Finance costs

 

(4,107)

Profit before tax

 

2,758

 

Operating assets/(liabilities)

 

 

 

 

 

 

Zambeef

Retailing

Master Pork

Other

Total

 

USD'000s

USD'000s

USD'000s

USD'000s

USD'000s

Property, plant and equipment

188,422

19,987

9,129

58,272

275,810

Biological assets and inventories

61,292

6,000

2,649

16,156

86,097

Cash, cash equivalents and bank overdrafts

(19,158)

(10,946)

(73)

1,539

(28,638)

 

Period ended 31 March 2017

                (i)            in Zambian Kwacha

 

Segment

Revenue

Gross Profit

 

ZMW'000s

ZMW'000s

Retailing - Zambia

731,070

61,432

Master Meats (Nigeria)

73,857

13,053

Master Meats (Ghana)

14,036

3,706

Retailing West Africa

87,893

16,759

Total Retailing

818,963

78,191

 

 

 

Beef

232,432

66,568

Chicken

149,472

32,562

Pork

126,417

18,584

Milk and dairy

86,378

16,859

Fish

30,482

5,737

Eggs

28,630

3,680

Total Cold Chain Food Production

653,811

143,990

Stock Feed

324,701

62,830

Crops - row crops

201,901

79,745

 

 

 

Mill and bakery

59,578

10,429

Leather and shoe

13,355

3,590

Edible oils

6,076

(1,151)

Total Other

79,009

12,868

Total

2,078,385

377,624

Less: intra/inter group Sales

(917,067)

-

Group total

1,161,318

377,624

 

 

 

Central operating costs

 

(333,464)

Operating profit

 

44,160

Foreign exchange gains

 

6,748

Finance costs

 

(45,128)

Profit before tax

 

5,780

 

 

Operating assets/(liabilities)

 

 

 

 

 

 

 

Zambeef

Retailing

Master Pork

Zampalm

Other

Total

 

ZMW'000s

ZMW'000s

ZMW'000s

ZMW'000s

ZMW'000s

ZMW'000s

Property plant and equipment and plantation development expenditure

1,105,237

212,287

65,705

149,980

405,009

1,837,941

Biological assets and inventories

565,505

45,835

21,651

51,541

113,264

797,796

Cash, cash equivalents and bank overdrafts

(207,229)

(82,828)

4,195

432

34,037

(251,393)

 

                Period ended 31 March 2017

                (ii)           in US Dollars

 

Segment

Revenue

Gross Profit

 

USD '000s

USD '000s

Retailing - Zambia

74,523

6,262

Master Meats (Nigeria)

7,529

1,331

Master Meats (Ghana)

1,431

378

Retailing West Africa

8,960

1,709

Total Retailing

83,483

7,971

 

 

 

Beef

23,693

6,786

Chicken

15,237

3,319

Pork

12,887

1,894

Milk and dairy

8,805

1,719

Fish

3,107

585

Eggs

2,918

375

Total Cold Chain Food Production

66,647

14,678

 

 

 

Stock Feed

33,099

6,395

Crops - row crops

20,581

8,139

 

 

 

Mill and bakery

6,073

1,062

Leather and shoe

1,361

366

Edible oils

619

(117)

Total Other

   8,053

  1,311

Total

211,863

38,494

Less: intra/inter group sales

(93,482)

-

Group total

118,381

38,494

 

 

 

Central operating costs

 

(33,992)

Operating profit

 

4,502

Foreign exchange gains

 

688

Finance costs

 

(4,600)

Profit before tax

 

590

 

Operating assets/(liabilities)

 

 

 

 

 

 

 

Zambeef

Retailing

Master Pork

Zampalm

Other

Total

 

USD'000s

USD'000s

USD'000s

USD'000s

USD'000s

USD'000s

Property plant and equipment and plantation development expenditure

114,414

21,976

6,802

15,526

41,926

200,644

Biological assets and inventories

58,541

4,745

2,241

5,336

11,725

82,588

Cash, cash equivalents and bank overdrafts

(21,452)

(8,574)

434

45

3,523

(26,024)

 

                Period ended 30 September 2017

                (i)            in Zambian Kwacha

 

Segment

Revenue

Gross Profit

 

ZMW'000s

ZMW'000s

Retailing - Zambia

1,440,784

164,450

Master Meats (Nigeria)

137,759

25,139

Master Meats (Ghana)

26,415

7,459

Retailing West Africa

164,174

32,598

Total Retailing

1,604,958

197,048

 

 

 

Beef

415,963

103,725

Chicken

297,340

65,686

Pork

243,491

36,980

Milk and dairy

172,516

49,338

Fish

55,438

10,591

Eggs

57,729

7,049

Total Cold Chain Food Production

1,242,477

273,369

 

 

 

Stock Feed

662,068

166,884

Crops - row crops

505,738

134,556

 

 

 

Mill and bakery

117,504

19,827

Leather and shoe

31,571

7,260

Edible oils

12,312

(313)

Total Other

161,387

26,774

Total

4,176,628

798,631

Less: intra/inter group Sales

(1,741,446)

-

Group total

2,435,182

798,631

 

 

 

Central operating costs

 

(711,978)

Operating profit

 

86,653

Foreign exchange gains

 

6,701

Finance costs

 

(87,904)

Profit before tax

 

5,450

 

Operating assets/(liabilities)

 

Zambeef

Retailing

Master Pork

Other

Total

 

ZMW'000s

ZMW'000s

ZMW'000s

ZMW'000s

ZMW'000s

Property, plant and equipment

1,915,758

167,854

85,779

441,097

2,610,488

Biological assets and inventories

561,928

47,624

22,837

51,886

684,275

Cash, cash equivalents and bank overdrafts

(24,435)

(96,578)

1,108

14,757

(105,148)

 

                Period ended 30 September 2017

                (i)            in US Dollars

 

Segment

Revenue

Gross Profit

 

USD'000s

USD'000s

Retailing - Zambia

151,343

17,273

Master Meats (Nigeria)

14,470

2,641

Master Meats (Ghana)

2,775

784

Retailing West Africa

17,245

3,425

Total Retailing

168,588

20,698

 

 

 

Beef

43,694

10,895

Chicken

31,233

6,900

Pork

25,577

3,884

Milk and dairy

18,121

5,183

Fish

5,823

1,113

Eggs

6,064

740

Total Cold Chain Food Production

130,512

28,715

 

 

 

Stock Feed

69,545

17,530

Crops - row crops

53,124

14,134

 

 

 

Mill and bakery

12,343

2,083

Leather and shoe

3,316

763

Edible oils

1,293

(33)

Total Other

16,952

2,813

Total

438,721

83,890

Less: intra/inter group Sales

(182,925)

-

Group total

255,796

83,890

 

 

 

Central operating costs

 

(74,788)

Operating profit

 

9,102

Foreign exchange gains

 

704

Finance costs

 

(9,234)

Profit before tax

 

572

 

Operating assets/(liabilities)

 

Zambeef

Retailing

Master Pork

Other

Total

 

USD'000s

USD'000s

USD'000s

USD'000s

USD'000s

Property, plant and equipment

198,114

17,358

8,871

45,615

269,958

Biological assets and inventories

58,110

4,925

2,362

5,366

70,763

Cash, cash equivalents and bank overdrafts

(2,630)

(9,987)

115

1,628

(10,874)

 

 

The Group's revenue from external customers and its geographic allocation of non-current assets may be summarised as follows:

 

31 Mar 2018

 

31 Mar 2017

 

30 Sept 2017

 

Revenues

Non-current assets

 

Revenues

Non-current assets

 

Revenues

Non-current assets

 

ZMW'000s

ZMW'000s

 

ZMW'000s

ZMW'000s

 

ZMW'000s

ZMW'000s

Zambia

1,133,060

2,811,187

 

1,059,419

2,178,848

 

2,246,553

2,795,711

West Africa

65,699

13,470

 

87,893

18,725

 

164,174

24,946

Rest of world

27,324

-

 

14,006

-

 

24,455

-

 

1,226,083

2,824,657

 

1,161,318

2,197,573

 

2,435,182

2,820,657

 

 

 

31 Mar 2018

 

31 Mar 2017

 

30 Sept 2017

 

Revenues

Non-current assets

 

Revenues

Non-current assets

 

Revenues

Non-current assets

 

USD'000s

USD'000s

 

USD'000s

USD'000s

 

USD'000s

USD'000s

 Zambia

114,451

296,538

 

107,993

225,555

 

235,983

289,112

 West Africa

6,636

1,421

 

8,960

1,938

 

17,245

2,580

 Rest of world

2,760

-

 

1,428

-

 

2,568

-

 

123,847

297,959

 

118,381

227,493

 

255,796

291,692

 

 

6.             Taxation

 

 

 

 

31 Mar 2018

31 Mar 2017

30 Sept 2017

Income tax expense

 

ZMW'000s

ZMW'000s

ZMW'000s

(a)

Tax charge

 

 

 

 

 

Current tax:

 

 

 

 

 

Tax charge

 

4,035

8,612

12,878

 

Deferred tax:

 

 

 

 

 

Deferred taxation (note 6(e))

 

298

(8,056)

(11,829)

 

Tax charge/(credit) for the period

 

4,333

556

1,049

 

 

 

 

 

31 Mar 2018

31 Mar 2017

30 Sept 2017

 

 

 

ZMW'000s

ZMW'000s

ZMW'000s

(b)

Reconciliation of tax charge

 

 

 

 

 

 Profit/(loss) before taxation

 

27,293

5,780

5,450

 

 Taxation on accounting profit

 

(2,998)

2,243

(6,872)

 

 Effects of:

 

 

 

 

 

Permanent differences:

 

 

 

 

 

 Disallowable expenses

 

1,283

2,372

1,191

 

Timing differences:

 

 

 

 

 

 Capital allowances and depreciation

 

(10,405)

(3,643)

1,763

 

 Livestock and crop valuations adjustment

 

(2,123)

2,166

3,283

 

 Other income

 

1,045

(4)

(5)

 

 Unrealised exchange gains/(losses)

 

69

527

1,581

 

 Unrealised tax loss

 

17,164

4,951

11,937

 

 Tax charge for the period

 

4,035

8,612

12,878

 

 

 

 

 

 

(c)

Movement in taxation account

 

 

 

 

 

Taxation payable at 1 October

 

1,612

6,063

6,063

 

Charge for the period

 

4,035

8,612

12,878

 

Under provision in prior period

 

-

170

-

 

Taxation paid

 

(5,749)

(4,368)

(17,329)

 

Taxation payable/(recoverable) at the end of the period

 

(102)

10,477

1,612

 

 

 

 

 

 

 

Taxation payable

 

8,617

12,046

2,988

 

Taxation recoverable

 

(8,719)

(1,569)

(1,376)

 

Taxation payable as at 30 September

 

(102)

10,477

1,612

 

(d)               Income tax returns have been filed with the ZRA for the tax year ended 31 December 2016. Quarterly tax returns for the period were made on the due dates.

 

(e)                Deferred taxation

 

 

 

 

31 Mar 2018

31 Mar 2017

30 Sept 2017

 

 

 

ZMW'000s

ZMW'000s

ZMW'000s

 

Represented by:

 

 

 

 

 

Biological valuation

 

12,099

14,423

11,005

 

Accelerated tax allowances

 

41,974

39,827

39,213

 

Provisions

 

(4,140)

(4,624)

(6,974)

 

Tax loss

 

(85,791)

(82,009)

(79,400)

 

 

 

(35,858)

(32,383)

(36,156)

 

Analysis of movement:

 

 

 

 

 

Asset as at 1 October

 

(36,156)

(24,327)

(24,327)

 

Charge to profit and loss account (note 6(a))

 

298

(8,056)

(11,829)

 

(Asset)/liability as at the end of the period

 

(35,858)

(32,383)

(36,156)

 

Deferred tax asset

 

(43,176)

(41,013)

(43,368)

 

Deferred tax liability

 

7,318

8,630

7,212

 

 

 

(35,858)

(32,383)

(36,156)

 

 

 

Income tax expense

 

31 Mar 2018

31 Mar 2017

30 Sept 2017

 

 

USD'000s

USD'000s

USD'000s

(f)

Tax charge

 

 

 

 

 

 

 

 

 

 

 

Current tax:

 

 

 

 

 

Tax charge

 

408

878

1,353

 

Deferred tax:

 

 

 

 

 

Deferred taxation (note 6(j))

 

30

(821)

(1,243)

 

Tax (credit)/charge for the period

 

438

57

110

 

 

 

 

 

 

(g)

Reconciliation of tax charge

 

 

 

 

 

 Profit/(loss) before taxation

 

2,758

590

572

 

 Taxation on accounting profit

 

(303)

229

(722)

 

 Effects of:

 

 

 

 

 

Permanent differences:

 

 

 

 

 

 Disallowable expenses

 

130

242

126

 

Timing differences:

 

 

 

 

 

 Capital allowances and depreciation

 

(1,051)

(371)

185

 

 Livestock and crop valuations adjustment

 

(215)

219

345

 

 Other income

 

106

-

(1)

 

 Unrealised exchange (gains)/losses

 

7

54

166

 

 Unrealised tax loss

 

1,734

505

1,254

 

 Tax charge for the period

 

408

878

1,353

 

 

 

 

 

 

(h)

 Movement in taxation account

 

 

 

 

 

Taxation payable at 1 October

 

167

605

605

 

Charge for the year

 

408

878

1,353

 

Taxation paid

 

(581)

(445)

(1,820)

 

Foreign exchange

 

(5)

47

29

 

Taxation payable as at the end of the period

 

(11)

1,085

167

 

 

 

 

 

 

 

Taxation payable

 

909

1,247

309

 

Taxation recoverable

 

(920)

(162)

(142)

 

Taxation payable as at 30 September

 

(11)

1,085

167

 

(i)                Income tax returns have been filed with the ZRA for the year 31 December 2016. Quarterly tax returns for the period were made on the due dates.

 

 

 

 

 

31 Mar 2018

31 Mar 2017

30 Sept 2017

(j)

Deferred taxation

 

USD'000s

USD'000s

USD'000s

 

Represented by:

 

 

 

 

 

Biological valuation

 

1,276

1,493

1,138

 

Accelerated tax allowances

 

4,429

4,123

4,055

 

Provisions

 

(437)

(479)

(721)

 

Tax loss

 

(9,050)

(8,490)

(8,211)

 

 

 

(3,782)

(3,353)

(3,739)

 

Analysis of movement:

 

 

 

 

 

Liability as at 1 October

 

(3,739)

(2,431)

(2,431)

 

Charge to profit and loss account (note 6(f))

 

30

(821)

(1,243)

 

Foreign exchange

 

(73)

(101)

(65)

 

(Asset)/liability as at the end of period

 

(3,782)

(3,353)

(3,739)

 

 

 

 

 

 

 

Deferred tax asset

 

(4,554)

(4,246)

(4,485)

 

Deferred tax liability

 

772

893

746

 

 

 

(3,782)

(3,353)

(3,739)

                                                                               

7.             Earnings per share

Basic and diluted earningsper share have been calculated in accordance with IAS 33 which requires that earnings should be based on the net profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares in issue during the period.

 

The calculation of the basic and diluted earnings per share is based on the earnings attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period.

 

The calculation of the basic and diluted earnings/(loss) per share is shown below:

 

 

31 Mar 2018

 

31 Mar 2017

 

30 Sept 2017

 

ZMW'000s

USD'000s

 

ZMW'000s

USD'000s

 

ZMW'000s

USD '000s

 Basic earnings per share

 

 

 

 

 

 

 

 

Profit for the period

12,295

1,243

 

5,519

563

 

4,037

424

 

 

 

 

 

 

 

 

 

Weighted average number of ordinary shares for the purposes of basic and diluted earnings per share

300,579

300,579

 

300,579

300,579

 

300,579

300,579

 

 

 

 

 

 

 

 

 

Basic and diluted earnings per share (Ngwee & US Cents)

4.09

0.41

 

1.84

0.19

 

1.34

0.14

From continued operations

7.85

0.79

 

1.84

0.19

 

1.72

0.18

From discontinued operations

(3.76)

(0.38)

 

-

-

 

(0.38)

(0.04)

 

 

8.             Biological assets

 

                (a)         31 March 2018

Biological assets comprise standing crops, feedlot and standing cattle, dairy cattle, pigs, chickens and palm oil plantation. At 31 March 2018 there were 14,178 cattle (10,615 feedlot cattle, nil standing cattle and 3,563 dairy cattle) and 518,518 chickens (314,498 layers and 204,020 broilers), and 4,553 pigs. A total of 16,445 feedlot cattle, 586 dairy cattle, 4,083 pigs and 3,687,624 chickens were culled during the period.

 

                (i)            in Zambian Kwacha

 

 

 

 

Gains arising

Gains arising

Decrease due to

 

 

 

Increase

from fair value

from fair value

harvest/

 

 

As at

due to

attributable to

attributable to

transferred

As at 31

 

1 Oct 2017

purchases

physical changes

price changes

to inventory

Mar 2018

 

ZMW'000s

ZMW'000s

ZMW'000s

ZMW'000s

ZMW'000s

ZMW'000s

Standing Crops

45,796

146,682

138,126

(4,377)

(112,384)

213,843

Feedlot cattle

46,507

94,975

41,436

-

(127,372)

55,546

Dairy Cattle

45,074

14,363

2,593

-

(21,402)

40,628

Pigs

3,688

3,723

1,755

94

(5,231)

4,029

Chickens

26,792

131,925

33,820

-

(167,225)

25,312

Total

167,857

391,668

217,730

(4,283)

(433,614)

339,358

 

                (ii)           in US Dollars

 

As at 1

Oct 2017

Foreign

exchange

Increase

due to

purchases

Gains arising

From fair value attributable to physical changes

Gains arising

from fair value attributable to price changes

Decrease due to

 to harvest/ transferred to inventory

As at

31 Mar

2018

 

USD'000s

USD'000s

USD'000s

USD'000s

USD'000s

USD'000s

USD'000s

Standing Crops

4,736

847

14,816

13,952

(442)

(11,352)

22,557

Feedlot cattle

4,811

135

9,593

4,185

-

(12,866)

5,858

Dairy Cattle

4,660

75

1,451

262

-

(2,162)

4,286

Pigs

381

10

376

177

9

(528)

425

Chickens

2,771

49

13,326

3,416

-

(16,891)

2,671

Palm Plantation

6,488

167

813

15

-

(9)

7,474

Total

17,359

1,116

39,562

21,992

(433)

(43,799)

35,797

 

                (b)         31 March 2017

Biological assets comprise standing crops, feedlot and standing cattle, dairy cattle, pigs, chickens and palm oil plantation. At 31 March 2017 there were 9,255 cattle (6,865 feedlot cattle, nil standing cattle and 2,390 dairy cattle) and 618,235 chickens (343,184 layers and 275,051 broilers), and 4,668 pigs. A total of 9,307 feedlot cattle, 315 dairy cattle, 4,812 pigs and 3,463,400 chickens were culled during the period. The palm plantation is in developmental stage with current plantation size of 2,911 hectares.

 

                (i)            in Zambian Kwacha

 

 

As at 1 Oct 2016

Increase due to purchases

Gains/(losses) arising from fair value attributable to physical changes

Gains arising from fair value attributable to price changes

Decrease due to harvest/ transferred to inventory

As at

31 Mar 2017

 

ZMW'000s

ZMW'000s

ZMW'000s

ZMW'000s

ZMW'000s

ZMW'000s

Standing Crops

60,377

137,602

266,533

-

(201,901)

262,611

Feedlot cattle

52,871

68,858

28,648

-

(114,831)

35,546

Dairy Cattle

46,103

12,670

1,570

-

(16,659)

43,684

Pigs

4,034

5,029

1,440

(91)

(6,570)

3,842

Chickens

23,641

141,464

7,910

-

(145,418)

27,597

Palm Plantation

48,480

3,061

-

-

-

51,541

Total

235,506

368,684

306,101

(91)

(485,379)

424,821

Less: non-current biological assets

(48,480)

(3,061)

-

-

-

(51,541)

Total

187,026

365,623

306,101

(91)

(485,379)

373,280

 

                (ii)           in US Dollars

 

 

As at 1 Oct 2016

Foreign exchange

Increase due to purchases

Gains/(losses) arising from fair value attributable to physical changes

Gains arising from fair value attributable to price changes

Decrease due to harvest/ transferred to inventory

As at 31 Mar 2017

 

USD'000s

USD'000s

USD'000s

USD'000s

USD'000s

USD'000s

Standing Crops

6,031

539

14,027

27,170

-

(20,581)

27,186

Feedlot cattle

5,282

164

7,019

2,920

-

(11,705)

3,680

Dairy Cattle

4,606

163

1,292

160

-

(1,698)

4,523

Pigs

403

14

513

147

(9)

(670)

398

Chickens

2,362

92

14,420

806

-

(14,825)

2,855

Palm Plantation

4,843

180

313

-

-

-

5,336

Total

23,527

1,152

37,584

31,203

(9)

(49,479)

43,978

Less: non-current biological assets

(4,843)

(180)

(313)

-

-

-

(5,336)

Total

18,684

972

37,271

31,203

(9)

(49,479)

38,642

 

 

 
 

 

                (c)            30 September 2017

Biological assets comprise standing crops, feedlot and standing cattle, dairy cattle, pigs, chickens and palm oil plantation. At 30 September 2017 there were 13,076 cattle (10,620 feedlot cattle and 2,456 dairy cattle) and 565,666 chickens (526,403 layers and 39,263 broilers), and 4,300 pigs. A total of 22,733 feedlot cattle, 1,358 dairy cattle, 9,295 pigs and 7,425,578 chickens were culled during the year.

 

                (i)            in Zambian Kwacha

 

 

 

 

Gains/(losses) arising

Gains arising

Decrease due to

 

 

 

Increase

from fair value

from fair value

harvest/

 

 

As at 1

due to

attributable to

attributable to

transferred

As at 30

 

Oct 2016

purchases

physical changes

price changes

to inventory

Sept 2017

 

ZMW'000s

ZMW'000s

ZMW'000s

ZMW'000s

ZMW'000s

ZMW'000s

Standing Crops

60,377

297,156

197,453

(3,452)

(505,738)

45,796

Feedlot Cattle

52,871

257,178

141,884

-

(405,426)

46,507

Dairy Cattle

46,103

60,922

110,529

-

         (172,480)

45,074

Pigs

4,034

9,588

2,221

(39)

(12,116)

3,688

Chickens

23,641

280,441

16,011

-

(293,301)

26,792

Total

187,026

905,285

468,098

(3,491)

(1,389,061)

167,857

 

                (ii)           in US Dollars

 

 

As at 1 Oct 2016

Foreign exchange

Increase due to purchases

Gains/ (losses) arising from fair value

attributable to  physical changes

Gains arising from fair value attributable to price changes

Decrease due to harvest / transferred to inventory

As at 30 Sept 2017

 

USD'000s

USD'000s

USD'000s

USD'000s

USD'000s

USD'000s

USD'000s

Standing Crops

6,031

237

31,214

20,741

(363)

(53,124)

4,736

Feedlot Cattle

5,282

197

27,015

14,904

-

(42,587)

4,811

Dairy Cattle

4,606

163

6,399

11,610

-

(18,118)

4,660

Pigs

403

15

1,007

233

(4)

(1,273)

381

Chickens

2,362

78

29,458

1,682

-

(30,809)

2,771

Total

18,684

690

95,093

49,170

(367)

(145,911)

17,359

                                                                                                                                                

               

9.             Cash and cash equivalents

 

 

31 Mar 2018

 

31 Mar 2017

 

30 Sept 2017

 

ZMW'000s

USD'000s

 

ZMW'000s

USD'000s

 

ZMW'000s

USD'000s

Cash in hand and at bank

61,857

6,525

 

56,416

5,840

 

62,518

6,465

Bank overdrafts

(333,345)

(35,163)

 

(307,809)

(31,864)

 

(167,666)

(17,339)

 

(271,488)

(28,638)

 

(251,393)

(26,024)

 

(105,148)

(10,874)

 

(a)            Banking facilities

 

The Group has overdraft facilities totalling ZMW74.6 million (2017: ZMW35.137 million) and USD5 million (2017: USD5.1 million) with Citibank Zambia Limited. The Citibank overdrafts bear interest rates of Bank of Zambia Policy rate plus 5 per cent. for the Kwacha facility and 6 month USD LIBOR rate plus 4.25 per cent. for the USD facility.

 

The Group has overdraft facilities totalling ZMW30 million (2017: ZMW30 million) and USD2 million (2017: USD2 million) with Standard Chartered Bank Zambia Plc. The Standard Chartered Bank overdrafts bear interest rates of Bank of Zambia Policy rate plus 5 per cent. on the Kwacha facilities and 1 month USD LIBOR rate plus 4 per cent on the USD facilities.

 

The Group has overdraft facilities totalling ZMW98.3 million (2017: ZMW98.3 million) with Zanaco Bank Plc. The Zanaco Bank overdraft bears an interest rate of Bank of Zambia Policy rate plus 5 per cent. on the Kwacha facility.

 

The Group has overdraft facilities totalling ZMW57.5 million (2017: ZMW54.7 million) and USD2 million (2017: USD6.3 million) with Stanbic Bank Zambia Limited. The Stanbic Bank overdrafts bear interest rate of Bank of Zambia Policy rate plus 5 per cent. on the Kwacha facility and 3 month USD LIBOR rate plus 4 per cent. on the USD facility.

 

                (b)           Bank overdrafts

 

31 Mar 2018

 

31 Mar 2017

 

30 Sept 2017

 

ZMW'000s

USD'000s

 

ZMW'000s

USD'000s

 

ZMW'000s

USD'000s

Bank overdrafts represented by:

 

 

 

 

 

 

 

 

Zanaco Bank PLC

(97,189)

(10,252)

 

(85,398)

(8,840)

 

(96,245)

(9,953)

Citibank Zambia Limited

(119,293)

(12,583)

 

(71,690)

(7,422)

 

(56,930)

(5,887)

Stanbic Bank Zambia Limited

(74,236)

(7,831)

 

(100,942)

(10,449)

 

(10,201)

(1,055)

Standard Chartered Bank Zambia PLC

(42,627)

(4,497)

 

(49,779)

(5,153)

 

     (4,290)

     (444)

 

(333,345)

(35,163)

 

(307,809)

(31,864)

 

(167,666)

(17,339)

 

(i)            The Zambeef Products Plc Company bank overdrafts are secured by a first floating charge/ debenture over all the assets of the Company. The floating charge/ debenture ranks pari passu between Standard Chartered Bank Zambia Plc (USD5 million), Citibank Zambia Limited (USD14 million and ZMW 8 million), Zanaco Bank Plc (USD4 million and ZMW98.3 million), and Stanbic Bank Zambia Limited (ZMW78.5 million).

 

All overdrafts are annual revolving facilities.

 

10.           Interest bearing liabilities

 

 

31 Mar 2018

 

31 Mar 2017

 

30 Sept 2017

 

ZMW'000s

USD'000s

 

ZMW'000s

USD'000s

 

ZMW'000s

USD'000s

DEG - Deutsche Investitions

und Entwicklungsgesellschaft MBH (note (a))

197,658

20,850

 

99,643

10,315

 

220,573

22,810

 

 

Zanaco Bank Plc (note (b))

19,929

2,102

 

26,571

2,751

 

26,571

2,748

International Finance Corporation (note (d))

140,181

14,787

 

184,681

19,118

 

159,174

6,230

Standard Chartered Bank Zambia PLC (note (c))

136,774

14,428

 

68,008

7,040

 

60,248

16,460

 

494,542

52,167

 

378,903

39,224

 

466,566

48,248

Less: short term portion of long term funding (repayable within next 12 months)

(210,190)

(22,172)

 

(145,314)

(15,043)

 

(138,328)

(14,304)

 

284,352

29,995

 

233,589

24,181

 

328,238

33,944

 

 

 

 

 

 

 

 

 

                                                                                                                                                                                                                     

(a)        (i)        DEG Term Loan 2

The Group had a loan facility of USDnil (2017: USD1.795 million and original amount of USD25 million) from DEG. Interest on the loan was 4.55 per cent. above the 6 month USD LIBOR rate per annum payable six-monthly in arrears. The principal was repayable in 14 bi-annual instalments of USD1,785,000 commencing November 2010 and expired in May 2017.

 

The USD25 million DEG term loan was secured by:

•     First ranking legal mortgage over Farm No. 4906, Lot No. 18835/M and Lot No. 18836/M (Sinazongwe farm); and

•     First ranking legal mortgage over Farm No. 10097, Farm No. R/E 5063 and Lot No. 8409/M (Chiawa farm).

(ii)       DEG Term Loan 3

The group has a loan facility of USD7.1 million (2017: USD:8.25 million and original amount of USD10 million). Interest on the loan is 4.25 per cent. above the 6 month USD LIBOR rate per annum payable 6 monthly in arrears. The capital is repayable in 14 biannual instalments of USD710,000 commencing May 2016 and expiring in November 2022.

 

The USD10 million DEG term loan is secured by:

•     First ranking legal mortgage over Farm No. 4906, Lot No. 18835/M and Lot No. 18836/M (Sinazongwe farm); and

•     First ranking legal mortgage over Farm No. 10097, Farm No. R/E 5063 and Lot No. 8409/M (Chiawa farm).

(iii)     DEG Term Loan 4

The group has a loan facility of USD13.75 million (2017: USD:nil million and original amount of USD15 million). Interest on the loan is 5.75 per cent. above the 6 month USD LIBOR rate per annum payable quarterly in arrears. The capital is repayable in 12 quarterly instalments of USD1,250,000 commencing March 2018 and expiring in March 2023.

 

The USD15 million DEG term loan is secured by:

•     Second ranking legal mortgage over Farm No. 4906, Lot No. 18835/M and Lot No. 18836/M (Sinazongwe farm); and

•     Second ranking legal mortgage over Farm No. 10097, Farm No. R/E 5063 and Lot No. 8409/M (Chiawa farm).

 

(b)           Zanaco Bank Plc

The Group has a loan facility of ZMW19.929 million (2017: ZMW33.2 million) with Zanaco Bank Plc.  Interest on the loan is 5 per cent. above the Bank of Zambia policy rate per annum payable monthly in arrears. The principal is repayable in 7 annual instalments of ZMW6,642,857 commencing December 2014 and expiring in December 2020.

 

The loan is secured by a first ranking legal mortgage over Stand No. 4970, Industrial Area, Lusaka (Head Office).

 

 

(c)            Standard Chartered Bank Zambia Plc

The Group has structured agricultural facilities with an annual revolving limit totalling USD20 million (2017: USD20 million) with Standard Chartered Bank Zambia Plc. The purpose of the facilities is the financing of wheat, soya beans, and maize under collateral management agreements and is for 180 days. The balance on the facilities at period end was USD14.4 million (2017: USD7.04 million). Interest on the facilities is 3 month USD LIBOR rate plus 3.25 per cent. per annum calculated on the daily overdrawn balances.

 

(d)           International Finance Corporation Loan

 

                (i)            International Finance Corporation Loan 1

The Group had a loan facility of USDnil (USDnil in Zambia and USDnil in Nigeria) [2017: USD0.636 million in Zambia and USD0.284 million in Nigeria and original amount of USD10 million] from IFC. Interest on the loan was 4.75 per cent. above the 6 month USD LIBOR rate per annum payable six-monthly in arrears. The principal was repayable in 11 equal bi-annual instalments of USD636,364 (Zambeef) and USD283,634 (Nigeria) commencing June 2012 and expired in June 2017.

 

The portion of the loan attributable to Zambia was secured through a first ranking legal mortgage over Plots 9070, 9071 and 9074, off Mumbwa Road, Lusaka, (Novatek stock feed premises) and the portion of the loan attributable to the Nigerian operations is secured by a floating charge over all assets of Master Meat and Agro Production Co of Nigeria Limited and a parental guarantee from Zambeef Products PLC.

 

                (ii)          International Finance Corporation Loan 2

The company has a loan facility of USD11.724 million and ZMW29.076 (2017: USD14.483 million in USD and ZMW35.917 million). Interest on the loan is 4.75 per cent. above the 6 month USD LIBOR rate per annum for the USD facility and 4.45 per cent. above the 91 day Treasury Bill rate plus a variable swap margin for the Kwacha facility payable quarterly in arrears. The principal is repayable in 29 equal quarterly instalments of USD689,655 and ZMW1,710,345 commencing June 2015 and expiring in June 2022.

 

The loan is secured through a first ranking legal mortgage over Farm No.s 4450, 4451 & 5388 (Mpongwe farm).

 

 

               

12.           Contingent liabilities

Certain legal cases are pending against the Company in the Courts of Law.  In the opinion of the Directors, and the Company lawyers, none of these cases will result in any material loss to the Company for which a provision is required.

 

13            Fair value measurement

Fair value measurement of financial instruments

Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three Levels of a fair value hierarchy. The three Levels are defined based on the observability of significant inputs to the measurement, as follows:

 

·     Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities

·     Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

·     Level 3: unobservable inputs for the asset or liability.

 

The following table shows the Levels within the hierarchy of financial assets and liabilities measured at fair value on a recurring basis at 31 March 2018 and 30 September 2017.

 

 

31 March 2018

Level 1

ZMW'000

Level 2

ZMW'000

Level 3

ZMW'000

Total

ZMW'000

Financial Assets

 

 

 

 

Other forwards exchange contracts inventory (CMA)

 

136,774

 

136,774

Total Assets

 

136,774

 

136,774

 

 

 

 

 

Financial Liabilities

 

 

 

 

US-dollar loans

 

(308,803)

 

(308,803)

Total Liabilities

 

(308,803)

 

(308,803)

 

 

 

 

 

Net fair value

 

(172,029)

 

(172,029)

 

 

30 September 2017

Level 1

ZMW'000

Level 2

ZMW'000

Level 3

ZMW'000

Total

ZMW'000

Financial Assets

 

 

 

 

Other forwards exchange contracts inventory (CMA)

 

-

 

60,248

 

-

60,248

Total Assets

-

60,248

-

60,248

 

 

 

 

 

Financial Liabilities

 

 

 

 

US-dollar loans

-

(347,279)

-

(347,279)

Total Liabilities

-

(347,279)

-

(347,279)

 

 

 

 

 

Net fair value

-

(287,031)

-

(287,031)

 

 

31 March 2018

Level 1

USD'000

Level 2

USD'000

Level 3

USD'000

Total

USD'000

Financial Assets

 

 

 

 

Other forwards exchange contracts inventory (CMA)

 

-

 

14,428

 

-

14,428

Total Assets

-

14,428

-

14,428

 

 

 

 

 

Financial Liabilities

 

 

 

 

US-dollar loans

-

(32,574)

-

(32,574)

Total Liabilities

-

-

-

-

 

 

 

 

 

Net fair value

-

(18,146)

-

(18,146)

 

 

 

30 September 2017

Level 1

USD'000

Level 2

USD'000

Level 3

USD'000

Total

USD'000

Financial Assets

 

 

 

 

Other forwards exchange contracts inventory (CMA)

 

-

 

6,230

 

-

6,230

Total Assets

-

6,230

-

6,230

 

 

 

 

 

Financial Liabilities

 

 

 

 

US-dollar loans

-

(35,913)

-

(35,913)

Total Liabilities

-

(35,913)

-

(35,913)

 

 

 

 

 

Net fair value

-

(29,683)

-

(29,683)

 

 

There were no transfers between Level 1 and Level 2 in 2018 or 2017.

 

Measurement of fair value of financial instruments

The Group's finance team performs valuations of financial items for financial reporting purposes, including Level 3 fair values, in consultation with third party valuation specialists for complex valuations. Valuation techniques are selected based on the characteristics of each instrument, with the overall objective of maximising the use of market-based information. The finance team reports directly to the Chief Financial Officer (CFO) and to the audit committee.

 

Valuation processes and fair value changes are discussed among the audit committee and the valuation team at least every year, in line with the Group's reporting dates. The valuation techniques used for instruments categorised in Levels 2 and 3 are described below:

 

Foreign currency forward contracts (Level 2)

The Group's foreign currency forward contracts are not traded in active markets. These have been fair valued using observable forward exchange rates and interest rates corresponding to the maturity of the contract. The effects of non-observable inputs are not significant for foreign currency forward contracts.

 

US-dollar loans (Level 2)

The fair values of the US-dollar loans are estimated using a discounted cash flow approach, which discounts the contractual cash flows using discount rates derived from observable market interest rates of similar loans with similar risk. The interest rate used for this calculation is 4.81% (2017: 4.81%).

 

Contingent consideration (Level 3)

The group did not have any contingent consideration during the year.

 

Fair value measurement of non-financial assets

The following table shows the Levels within the hierarchy of non-financial assets measured at fair value on a recurring basis at 31 March 2018 and 30 September 2017:

 

 

31 March 2018

Level 1

ZMW'000

Level 2

ZMW'000

Level 3

ZMW'000

Total

ZMW'000

Property, plant and equipment:

 

 

 

 

Land held for production in Zambia

-

1,185,976

-

1,185,976

Office building in Zambia

-

39,407

-

39,407

 

 

 

 

 

 

30 September 2017

Level 1

ZMW'000

Level 2

ZMW'000

Level 3

ZMW'000

Total

ZMW'000

Property, plant and equipment:

 

 

 

 

Land held for production in Zambia

-

1,178,526

-

1,178,526

Office building in Zambia

-

39,407

-

39,407

 

 

 

 

 

 

31 March 2018

Level 1

USD'000

Level 2

USD'000

Level 3

USD'000

Total

USD'000

Property, plant and equipment:

 

 

 

 

Land held for production in Zambia

-

125,103

-

125,103

Office building in Zambia

-

4,157

-

4,157

 

 

 

 

 

 

30 September 2017

Level 1

USD'000

Level 2

USD'000

Level 3

USD'000

Total

USD'000

Property, plant and equipment:

 

 

 

 

Land held for production in Zambia

-

121,874

-

121,874

Office building in Zambia

-

4,075

-

4,075

 

 

 

 

 

 

 

Fair value of the Group's main property assets is estimated based on appraisals performed by independent, professionally-qualified property valuers, Fairworld Properties Limited. The significant inputs and assumptions are developed in close consultation with management. The valuation processes and fair value changes are reviewed by the Board of Directors and audit committee at each reporting date.

 

Further information is set out below.

 

Land held for production in Zambia (Level 2)

Land has been valued using the direct comparison method. This method has been adopted as the most appropriate for the purpose of this valuation as there are enough comparisons available on the open market for land. The land was revalued on 30 September 2017.

 

The significant unobservable input is the adjustment for factors specific to the land in question. The extent and direction of this adjustment depends on the number and characteristics of the observable market transactions in similar properties that are used as the starting point for valuation. Although this input is a subjective judgement, management considers that the overall valuation would not be materially affected by reasonably possible alternative assumptions.

 

The fair values of the office buildings are estimated by using the direct comparison method. This method has been adopted as the most appropriate for the purpose of this valuation as there are enough comparisons available on the open market for buildings.

 

Level 3 fair value measurement

The Group did not have any financial instruments classified within level 3(30 September 2017: ZMW nil: 31 March 2017: ZMW nil) therefore no reconciliation of balances is required.

 

14.           Assets held for sale

During the previous period management decided to sell 90% of a 100% owned subsidiary, Zampalm Limited (Zampalm). The sale was concluded on 6 April 2018. As such the assets and liabilities of Zampalm are disclosed in accordance with IFRS 5.

 

The income generated by assets held for sale was generated as follows:

 

March 2018 ZMW'000

March 2018 USD'000

Revenue

86

9

Cost of sales

(6,244)

(631)

Administration costs

(4,804)

(485)

Operating loss

(10,962)

(1,107)

Depreciation

(328)

(33)

Loss from discontinued operations before tax

(11,290)

(1,140)

Tax (expense)/credit

-

-

Loss for the period

(11,290)

(1,140)

 

The assets and liabilities of the unit held for sale are as follows:

 

March 2018 ZMW'000

March 2018 USD'000

Property, plant and equipment

48,317

5,097

Plantation development expenditure

115,443

12,177

Biological assets

70,856

7,474

Total non-current assets

234,616

24,748

 

 

 

Inventories

4,136

436

Trade and other receivables

558

59

Cash and cash equivalents

627

66

Total current assets

5,321

561

Assets classified as held for sale

239,937

25,309

 

 

 

Interest bearing liabilities

-

-

Deferred liability

-

-

Deferred income tax

-

-

Total non-current liabilities

-

-

 

 

 

Trade and other payables

12,092

1,276

Total current liabilities

12,092

1,276

Liabilities classified as held for sale

12,092

1,276

 

The cash flow effects of the unit held for sale are as follows:

 

March 2018 ZMW'000

March 2018 USD'000

 

 

 

Cash inflow from operating activities

(11,290)

(1,140)

 

11.           Events subsequent to reporting date

There has not arisen since the end of the 6 months period any item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company, to affect substantially the operations of the economic entity, the results of those operations or the state of affairs of the economic entity in the subsequent financial years.                           

 

On 6 April 2018, Zambeef completed the sale of 90% of Zambeef's shareholding in its wholly owned subsidiary Zampalm Limited, to the state-owned Industrial Development Corporation (IDC) for a cash consideration of USD16 million.


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
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