The period under review saw a fluid and challenging environment, with the final quarter of FY24 witnessing currency reforms in the form of the introduction of the Zimbabwe Gold currency. 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 2H24 impacted several goods in the company’s portfolio leading to a direct growth of 6% in the monthly 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 6% uplift versus the comparative period last year to 585,039 tons. Growth was largely supported by performances from the maize and stock feed divisions. In the maize division, volumes grew 21% y/y buoyed by constrained supply on the local market as well as reduced household stocks. Volumes in the stockfeed division have maintained an upward trend, growing 8% in the year under review largely supported by the poultry category and to a lesser extent, the dairy category. The down-packing division was however impacted by the ban of rice exports out of India and the imposition of VAT on rice sales locally, both of which led to increased prices in the category, and as a result reduced demand. Volumes for rice fell 21% in the year whilst biscuit volumes retreated 23% in the year. In the cereals unit, volumes saw a 14% increase whilst in the snacks division, volumes saw a 45% increase supported by additional production capacity. The group’s new pasta line was commissioned in February 2024 making it the first ever commercial scale pasta line in the country. Flour volumes remained flat on increased competition, with demand in the category generally muted. Revenue for National Foods saw an uplift of 5.59% to US$359.36mn in FY24, from US$343.58mn in FY23. Despite pressure on operating costs, EBITDA margin remained flat at 6.8%. The group however managed to restructure their debt resulting in a 50% drop in the net interest charge to US$2.60mn. Notably, the group also saw financial income for the period turn from a loss position of US$5.18mn in the prior year to a credit of US$0.87mn. PAT for the period subsequently registered at US$13.76mn, up 82.9% y/y. The group closed the period on a net cash position of US$7.66mn and operating on an OCF/EBITDA of 99% with expansion capex of US$12.05mn within the period. National Foods declared a final dividend of USc3.29, bringing the total dividend for FY24 to USc6.71. This represents a dividend yield of 3.52%.
