National Foods to invest $5m on capex

Published: 06 March 2014

Zimbabwe Stock Exchange listed firm National Foods Holdings Ltd says it will invest $5,3 million for capital expenditure projects to boost capacity.

In a statement accompanying the financial results for the six months to December 2013, Natfoods chairman Todd Moyo said the projects would be implemented over the next six months.

"Over the next 6 month period, the group has committed to capital expenditure projects to the value of $5,3 million in accordance with long term improvement plans," he said.

Natfoods is also investing over $30 million for the refurbishment of its flour mills over the next three years.

Moyo said the group utilised $1,8 million on capital projects for the period under review as part of a long term asset upgrade and mordenisation programme.

During the period under review, flour volumes sold decreased 4 percent due to the unwinding of flour imports by bakers resulting in a 5 percent drop in turnover.

The group's maize milling division experienced a 9 percent increase in sales growth spurred by an increased demand for Red Seal roller meal and Pearlenta. Net revenue generated in this division also grew by 30 percent due to increases in maize prices locally and regionally.

The group's total volumes increased by 4,4 percent from the prior year after selling 257 000 tonnes. The marginal increase in volume drove a 10 percent increase in the company's revenue from $150,9 million in the prior year to US165,8 million in the period under review.

Profit recorded for the period amounted to $6,8 million down from $7,6 million in the previous year. Net borrowings for the period stood at $15,5 million implying a gearing ratio of 23,6 percent.

The group's total assets went up 13,7 percent from the prior year's figure of $114,1 to $129,8. Total liabilities went up 20 percent to $64,2 million from $53,3 million.

Basic earnings per share went down from US11,17c to US10,04c while headline earnings per share also declined to US10,01c in the period under review from US10,17c.
- BH24