The operating environment remained complex during the review period, largely characterized by a fluid policy environment. Of note, substantial fiscal policy changes were instituted by the MoFED thereby changing the VAT status of most goods in the group’s portfolio. Despite the challenging environment, the Group saw positive volumes growth across the core segments of the business. In the Mill-Bake segment, Bakery volumes improved 12% supported by additional capacity and stable flour pricing amongst other factors. National Foods volumes grew an aggregate 6% driven by mature milling operations and strong uptake of products in the newly established FMCG cluster. Maize volumes grew 21% in the year, supported by lower household maize stocks in light of the El- Nino drought. Flour volumes were however flat y/y. Volumes in the Downpacking division retreated 21% y/y on account of the ban on rice exports from India as well as pricing pressures locally from the VAT. Profeeds volumes were impacted by a material silo collapse at the Harare Factory with outsourcing arrangements having to be made. As a result, volumes were only up 2% y/y. In the Nutrimaster segment, volumes in the fertilizer division were up 34% y/y spurred by increased product supply into the commercial row cropping, horticulture and tobacco sectors. In the protein segment, fresh pork volumes were up 5%, Irvine's volumes were muted and AMP saw a 7% growth powered by a 35% recovery in the beef category. Under the Beverages and Other Light Manufacturing segment, volumes under Prodairy, Probottlers, and Natpak grew 26%, 12% and 13%, respectively. Volumes at ProBrands however lagged behind the comparable period owing to a restructuring of operations. At group level, revenue increased 13.2% from US$804.04mn to US$910.07mn. The group registered EBITDA of US$86.05mn, with the EBITDA margin easing from 11.3% to 9.4%. Operating costs were largely impacted by an upsurge in power costs with key commodities such as human capital, raw materials as well as fuel requiring settlement in USD. The depreciation and amortization charge increased 22% driven by significant investment in PPE. Net interest charge reduced 31% y/y to US$9.24mn on restructuring of borrowings whilst earnings from associate companies saw a 190% increase to US$4.99mn. The group ended the period on a profit of US$48.16mn, up 27% y/y and subsequently declared a final dividend of USc1.25, bringing the total dividend of the year to USc2.65. This represents a dividend yield of 5.90% at current levels. Innscor remained in a healthy cash position for the period with an OCF/EBITDA of 101%. Notably, the Group has uncertain tax positions amounting to US$11.75mn for the periods 2019 to 2021, with the matter currently being challenged before the courts. The Group in the interim has paid US$9.26mn of the amount.
