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DAIRIBORD Holdings’ core earnings fell 170 percent in the six months to June this year due to unusually high costs, including retrenchment packages and relocation of machinery. One of the country’s largest dairy processors made an operating loss of US$3,1 million compared with US$4,4 million operating profit recorded a year earlier, it said in statement.
Dairibord embarked on retrenchment to cut costs while equipment from Bulawayo and Mutare was relocated to functional factories in Harare and Chitungwiza. Revenue for the period was 1 percent up to US$49 million and expenses were US$4,3 million.
“The rationalisation objective was to consolidate operations and reduce overhead costs,” group chairman Dr Leonard Tsumba said in a statement accompanying the company’s half-year results.
“Savings are expected in the second half of the year.”
Borrowings rose by US$900 000 to US$7,9 million to reflect a gearing ratio of 15 percent.
Raw milk intake grew by 2 percent to 13,1 million litres. The economic activity has remained subdued during the first half of the year mainly due to liquidity constraints.
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