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(Sharecast News) - Beef producer Zambeef said on Wednesday that earnings per share for the year ended 30 September were expected to be 83% lower year-on-year, while pre-tax profits were said to be hit by an impairment loss.
Zambeef said reported pre-tax profits were now expected to be affected by an impairment loss of K 142.0m (£6.90m) related to Zamchick. However, the group stated that Zamchick was "profitable and cash generative" in the 2022 trading year and was expected to remain so in 2023.
However, whilst Zamchick was expected to remain profitable in the future, the expected impairment reflected a reduction in the board's expectations of the unit's future economic performance.
The AIM-listed group also highlighted that "constrained consumer spending" had negatively impacted volume growth in its retail and cold chain food products, particularly in the first half of the financial year, while the period saw an escalation in key input prices such as fuel, chemicals, and fertiliser, which impacted margins. Zambeef also said it saw outbreaks of contagious bovine pleuropneumonia and African swine fever.
"Despite these headwinds, performance in cropping, milling, and stockfeed enabled the group to achieve adjusted EBITDA in line with market expectations owing to high grain prices, market share gains, and cost containment," said Zambeef.
As of 1025 GMT, Zambeef shares were up 4.24% at 7.90p.
Reporting by Iain Gilbert at Sharecast.com
