The period under review saw a fluid and challenging environment. Price distortions persisted in the formal sector with less consumer activity recorded in that channel. Changes to Value Added Tax that went into effect in 2Q24 had a negative impact on the cost of production. However, the period also saw a downward correction in global wheat prices allowing for price reductions, especially in the bread value chain. Aggregate volumes saw a 3.4% uplift versus the comparative period last year to 285,000 tons. The stockfeed division led in performance with a 14% increase in volumes on the back of performances in the poultry and beef categories. The flour unit experienced a 5% increase in volumes aided by lower wheat prices. The maize division however saw volumes decline 9.5% whilst the biscuits segment fell 27%. The downpacked segment also saw a 17% loss of volumes influenced by a ban of rice exports from India, the main source market for the Group. Volumes in the cereals unit grew by 7% over the comparative period, despite challenges in the formal channel. The pasta division grew 11% y/y. Revenue in the period grew in line with volumes performance, displaying a 3% uplift to US$172.41mn. However, margins came under pressure from a rebasing of power costs as well as higher wages. Operating costs increased 7.9% to US$25.65mn. As a result, EBITDA fell 21% in nominal terms to US$11.04mn, whilst EBITDA margin slowed down to 6.4% from 8.3% in the prior period. The group however managed to restructure their debt resulting in a 64% drop in the net interest charge to US$1.29mn. Notably, the group also saw financial income for the period turn from loss position of US$2.85mn in the prior year to a credit of US$1.62mn. PAT for the period subsequently registered at US$9.6mn, up 56% y/y. The group closed the period on a net cash position of US$5.94mn and operating on an OCF/EBITDA of 154% with US$7.60mn being used for capital expenditure activities within the period. National Foods declared an interim dividend of USc3.25, with shares trading ex- dividend from the 3rd of April 2024.
