Food and dairy products maker Dairibord Holdings recorded a 14 percent jump in milk volumes for the quarter to March 31, 2024, supported by an increase in raw milk uptake.

In a trading update for the quarter, company secretary Mr Maurice Karimupfumbi said the group has been aggressively pursuing raw milk growth initiatives, which have started to yield impressive results.

Raw milk intake grew by 38 percent to 9,46 million litres compared to 6,86 million litres in the prior year's comparative quarter.

The growth was ahead of the 21 percent national growth in milk intake by processors for the same period under review. Dairibord continues to be the processor with the largest raw milk intake and widest milk intake base in the country.

"The group's commitment to its suppliers and farmer support initiatives will ensure a sustainable milk supply for long-term growth," he said.

Overall sales volumes for the quarter increased by 2 percent anchored by the milk and food categories. Liquid milk volumes closed the quarter 14 percent above the same quarter in the prior year while the foods category recorded a 7 percent growth from the prior year comparative quarter. However, the beverages category was depressed recording a 3 percent decline.

According to the group, the proportion of US dollar sales volumes increased to 85 percent, up from the 58 percent recorded in the same period last year, as the transactions according to the Reserve Bank of Zimbabwe (RBZ) have largely become dollarized accounting for over three-quarters of local transactions.

Mr Karimupfumbi further highlighted the growth in US dollar sales volumes was also buoyed by a significant 97 percent increase in export volumes. In contrast, domestic volumes declined by a marginal 3 percent.

Exports accounted for 9 percent of total sales volume, up from 4 percent in the prior period. Despite the operational headwinds in the environment, particularly the adverse impact of the sugar surtax on cost and pricing models, the business still showed resilience by posting growth in sales volume Revenue for the quarter was 1 percent below the comparative quarter last year due to a lower price per litre.

Due to successful cost containment efforts, operating costs decreased by 16 percent which spawned an improvement in the operating profit margins of the business at 10 percent compared to 6 percent in the same period last year.

While the environment is expected to remain challenging due to a myriad of factors ranging from geo-political tensions and the impacts of the El Nino phenomenon on the region, management at Dairibord remains upbeat about its prospects.

"Despite the upcoming quarter being characterized by the customary low weather-induced demand, the group is geared to exploit opportunities presented by recently completed and ongoing capital investment projects aimed at optimizing efficiencies and boosting capacity.

"Aggressive cost containment and reduction initiatives will continue and further improve profitability," said Mr Karimupfumbi.

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