Dairibord Holdings expects a profitable first half with revenue for the year to date 15 percent up while volumes and prices are higher than the same period last year.
Chief executive Anthony Mandiwanza told shareholders at the annual general meeting that average selling prices went up seven percent, benefiting from adjustments made in the last quarter of 2017 to counter a significant increase in prices of raw and packaging materials that were putting pressure on margins.
“As a result, the first half of 2018 is projected to be better than same period 2017 hence group focus will be on sustaining the current momentum on volume growth, exports, milk intake and cost containment,” said Mandiwanza.
“Demand remained firm across all categories but foreign currency induced supply constraints negatively impacted product supply.”
Raw milk intake across the group was eight percent above 2017, reflecting positive impact of milk supply strategies.
“Potential demand was not fully met while potential exports revenue was affected by product supply, price competitiveness and credit quality limitations for export customers,” Mandiwanza said.
Inflationary pressure will continue due to the increase in prices of inputs driven by foreign currency challenges and significant wage pressures. With the country in election season, the company’s ability to align demand and supply will remain constrained, he added. – The Source