Zambeef FY results seen in line with expectations

Cold chain foods and retail business Zambeef Products expects full-year revenues and underlying earnings to be in line with current estimates despite significant pressures to the Zambian economy stemming from Covid-19.

Zambeef said despite the uncertainty caused by the Covid-19 pandemic, consumer demand for products in Zambia, Nigeria and Ghana has had "stood up well", with underlying earnings and pre-tax profits both 25% ahead of market expectations.

However, the AIM-listed group said the Zambian economy had been "under significant pressure" over the last six months due to "weak macroeconomic fundamentals exacerbated by the onset of the Covid-19 pandemic".

"This has led to a sharp depreciation of the local currency which has increased certain input costs into the business, and foreign exchange losses on our foreign currency-denominated debt," said Zambeeef, which added that despite a "convincing performance" in the first half, it had seen a slowdown in profitability growth in the second half.

As a result, Zambeef said it had taken "appropriate actions" to rationalise costs and preserve balance sheet flexibility.

As of 1330 GMT, Zambeef shares were down 5.66% at 6.25p.