INN | Innscor Africa Limited 1H24 Earnings Update; Revenue growth underpinned by improved capacity utilization

    The operating environment remained fragile encompassed by currency volatility and inflationary pressures. However, the period also saw the extension of the ongoing multi-currency regime to 2030. Despite challenges in the environment, the Group saw positive volumes growth across most segments.  The Mill-Bake segment saw a recovery in volumes, with Bakery volumes increasing 23% on account of improved wheat pricing and route-to-market strategies. National Foods volumes grew 3.4% driven by a recovery in flour volumes (+5%) and continued performance of the Stockfeed business (+14%) whilst the Snacks business operated at capacity for the period, with a 31% uplift in volumes. Maize volumes however closed the period marginally behind on account of pricing distortions in formal channels and increased competition from imports and decentralized millers. The down-packed unit also saw a 17% slide in volumes owing to a ban in the export of rice from India. Profeeds continued to operate at full capacity for much of the period under review and grew volumes 4% y/y whilst Nutrimaster fertiliser volumes increased 77% boosted by a strong order book. In the protein segment, Colcom volumes grew 5% whilst under Irvines, day-old chicks and frozen chicken categories grew 4% and 8% respectively. The AMP Group saw a 25% uplift in volumes sold owing to a recovery in the beef segment. Under beverages and light manufacturing, Prodairy saw an aggregate volumes growth of 49% driven by capacity enhancements whilst Mafuro farming delivered a 76% growth in raw milk production. The sorghum beer category reportedly posted encouraging results within its first year of operations. Probottlers saw a 22% increase in volumes whilst overall aggregate volumes at Natpak closed 19% ahead of prior comparable period. Revenue for the 6 months saw a surge of 20% to US$480.41mn underpinned by a cocktail of measures to drive growth, including improvements in capacity utilization. However, expenditures grew at a faster rate resulting in EBITDA margin slowing down from 14.23% to 10.56%. However, a 51% decrease in net interest costs to US$4.44mn owing to restructuring of borrowings as well as 233% increase in equity accounted earnings boosted the bottom line by 12% to US$33.42mn. Innscor remained in a healthy cash position for the period with an OCF/ EBITDA of 113%. The Group declared an interim dividend of USc 1.40 per share, with shares trading cum dividend till the 9th of April.


    Download (652.52 KB)