Sundaymail Editor
Sunday Mail Reporter
Listed industrial concern Innscor Africa Limited, which has tentacles in most consumer-facing businesses such as meat processing, milling, packaging, among many of its businesses, recorded strong volumes across its business units and has committed more than US$70 million for short-term expansion projects.
Market watchers say its solid performance, especially in the wake of the coronavirus pandemic, indicated increased industrial production, recovering consumer demand and an improving operating environment.
The Government, which has made a commitment to promote private-sector led growth, has instituted reforms to stabilise the economy and create an enabling environment for business to thrive.
In its latest financials for the year ended June 30, 2021, Innscor’s revenues rose 406 percent to $56 billion from $11 billion a year earlier.
Net profit rose to $10 billion from $4,4 billion in the same period.
There were record high sales in Irvines, where volumes increased by 8 percent, while there was also strong growth in the bakery division (36 percent), grocery (74 percent), Colcom (34 percent), stockfeed (33 percent), day-old chicks (29 percent), chicken (21 percent) and Natfoods (15 percent)
The conglomerate straddles most economic sectors as it has interests in National Foods, Profeeds, Colcom, Associated Meat Packers (AMP), Pangolin Limited, Prodairy and Natpack.
Innscor’s independent non-executive chairperson Mr Addington Chinake said “market sentiment was generally positive”.
“As a result, a sustained reduction in inflation was experienced as pricing models were able to be set with more certainty. Market sentiment was generally positive, with a distinct improvement in consumer confidence contributing to firm aggregate demand, despite the backdrop of the ongoing Covid-19 global pandemic.”
It said last season’s excellent rainy season also contributed to the general economic improvement, giving rise to increased production and supply of key local raw materials such as maize and wheat.
The group said the company’s financial position remained robust, with a strong asset base supported by fixed assets and inventory positions and minimal gearing at year-end.
“The stable operating environment also gave rise to various corrections within the real cost base of our businesses.
“In addition to the persistently high cost of debt, pricing corrections to the fuel, power, maintenance and human capital cost lines impacted the overhead base whilst gross margin levels approached more normalised levels, as inflation-induced distortions dissipated; this was further impacted by the current global commodity price cycle and pandemic-induced supply chain disruptions, placing cost-push pressure onto a number of components within the bills of material.”
Among Innscor’s mulled investments are a new flour milling plant in Bulawayo expected to be commissioned in 2022 and a new pig production unit. Business lobby group Confederation of Zimbabwe Industries (CZI) is optimistic that capacity utilisation will rise to 60 percent this year from 47 percent in 2020.
Most listed companies are recording strong volumes as a result of improved consumer demand and increased spending on infrastructure projects. The foreign currency auction market, which was introduced on June 23 last year, has stabilised the exchange rate and prices and improved access to foreign currency.
President Mnangagwa continues to implement far-reaching reforms expected to drive more investments in the private sector.
Online Reporter