Colcom profits slump

Food processor Colcom recorded a 200 percent slump in profits from $4,8 million last year to $1,6 million for the half year ended 30 June 2013 on the back of low product margins.The company, which described the results as “disappointing”, said prices of raw materials had gone up during the period while product prices were maintained.

“Colcom recorded a disappointing result for the year,” group chairman Mr Robert Davenport said.

Equipment failures which resulted in a five percent drop in production volumes also hit on performance while other provisions amounting to $2,3 million impacted on the bottom line.

In spite of the decline in overall profitability, group revenue shot up to $61 million from $53 million last year.
Shareholders also bore the brunt of the decline in profitability as basic earnings per share also slumped to $0,87 from $2,87.

Mr Davenport said the company would address equipment challenges through an investment of $1,4 million in new machinery.

“This equipment will provide adequate capacity in emulsification, cooking and packaging to produce the appropriate quantity and quality of product that is expected to be delivered into the target market into the foreseeable future,” he said.

The Colcom board opted not to declare a dividend as it sought to direct profits towards investment in restoring infrastructure and boosting capacity.

Colcom operations are focused mainly on pork processing, with the group indicating that it slaughtered 57 646 pigs during the period up from 56 721 in the prior period. — New Ziana.