Diversified Industrial group, Innscor Africa Limited posted a 100 percent growth in operating profit to $80,5 million for the six months up to December 2018 from $40,2 million recorded in the comparative prior period.
The group’s revenue surged by $185 million to $490 million recording a 61 percent jump as profit after tax improved 167 percent to $64 million from previously recorded $24 million.
Innscor’s impressive performance was driven by a diverse volume performance across operations as Prodairy recorded 70 percent growth in volumes while Profeeds recorded a 42 percent increase in feed volumes uptake.
Both Natpak and Colcom posted a 27 percent growth in volumes. The latter’s growth stemmed from development of a piggery which availed 25 percent of raw materials needed for pies, easing raw materials procurement costs on the pies business segment.
Natpak volumes growth was driven by increased utilisation of the newly commissioned corrugated plant as well as growth in uptake from sacks division.
Period under review also witnessed the resurgence Irvine’s Zimbabwe as it recorded double digit growth volumes as the recovery process from the Avian influenza continues.
In a statement accompanying the half year results Innscor indicated that subdued foreign currency supply was a limitation to maximum capacity utilisation. The company also cited price hikes and margin distortions as some of the turbulences encountered during the period in question resultant of fiscal changes in October.
“The period under review witnessed continued difficulties in accessing sufficient foreign currency supply to support both working capital and capital expenditure requirements, this led to production constraints and delays in a number of capital projects.
“Significant changes in fiscal and monetary policies were introduced midway through the period under review including the separation of Nostro FCA and RTGS balances and the introduction of an increased rate of Intermediated Money Transfer tax (IMMT). A period of steep inflation took place as market adjusted to these changes resulting in extreme pricing and margin distortions, cost push and the need to replace stock with considerably higher valued raw material,” said Innscor.
The group intends to shift focus towards wheat flour value chain to contain the increasing consumption of the product in the country.