DAIRIBORD HOLDINGS LIMITED AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED
31 DECEMBER 2022
ENDURABLE BUSINESS,
ENDURABLE BRANDS
SHORT-FORM ANNOUNCEMENT
Issued in terms of Practice Note 13 of the Zimbabwe Stock Exchange.
This short-form financial announcement is the responsibility of the Directors and is only a summary of the information contained in the full announcement and does not contain full or complete details. Any investment decisions by investors and/or shareholders should be based on consideration of the full announcement published on the Zimbabwe Stock Exchange Data Portal and the Company website www.dairibord. com.
The full announcement is available for inspection, at no charge, at the registered office of the Company, 1225 Rekayi Tangwena Avenue, Harare.
FINANCIAL HIGHLIGHTS
AUDITED INFLATION ADJUSTED | *UNAUDITED HISTORICAL COST | |||
31 Dec 2022 | 2022 vs | 31 Dec 2022 | 2022 vs | |
ZWL'000 | 2021 | ZWL'000 | 2021 | |
Financial | ||||
Revenue | 63,377,265 | 40% | 45,631,178 | 329% |
Earnings before interest, tax, depreciation,and amortisation | 7,173,606 | 111% | 4,511,420 | 321% |
Operating profit | 6,031,423 | 154% | 4,349,981 | 327% |
Profit attributable to owners of the parent | 1,754,487 | 742% | 2,015,924 | 323% |
Net Asset value | 18,479,605 | 58% | 12,134,183 | 544% |
Basic Earnings per share | 4.90 | 742% | 5.63 | 323% |
Volume (Litres'000) | ||||
Raw milk utilised | 28,506 | 4% | 28,506 | 4% |
Sales | 97,103 | 3% | 97,103 | 3% |
DIVIDEND
The Board declared a final dividend of ZWL358,000,858 from 2022 profits. The dividend translates to ZWL1 per share. The dividend will be paid on or about 31 May 2023.
AUDITOR'S STATEMENT
These abridged inflation-adjusted consolidated and separate financial statements should be read in conjunction with the complete set of the inflation-adjusted consolidated and separate financial statements for the year ended 31 December 2022.
The inflation adjusted consolidated and separate financial statements have been audited by Deloitte & Touche Chartered Accountants (Zimbabwe) ("Deloitte"), who have issued a modified opinion with respect to prior year valuation of investment property and property plant and equipment. The auditor's report on the inflation-adjusted consolidated and separate financial statements, from which these abridged inflation-adjusted consolidated and separate financial statements are extracted, is available for inspection at the Company's registered office.
The Engagement Partner responsible for the audit was Mrs Charity Mtwazi, PAAB Practice Certificate Number 0585.
Directors:
J. Sachikonye (Chairman), *M.R. Ndoro (Group Chief Executive), N. Chiromo, C.R.J. Hawgood, B. Henderson, R.P. Kupara,
C. Mahembe, K.K. Naik. * EXECUTIVE
Registered Office:
1225 Rekayi Tangwena Avenue, Harare, Zimbabwe. Website: www.dairibord.com
AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED
31 DECEMBER 2022
ENDURABLE BUSINESS,
ENDURABLE BRANDS
FINANCIAL HIGHLIGHTS
AUDITED INFLATION ADJUSTED | *UNAUDITED HISTORICAL COST | |||
31 Dec 2022 | 2022 vs | 31 Dec 2022 | 2022 vs | |
ZWL'000 | 2021 | ZWL'000 | 2021 | |
Financial | ||||
Revenue | 63,377,265 | 40% | 45,631,178 | 329% |
Earnings before interest, tax, depreciation,and | ||||
amortisation | 7,173,606 | 111% | 4,511,420 | 321% |
Operating profit | 6,031,423 | 154% | 4,349,981 | 327% |
Profit attributable to owners of the parent | 1,754,487 | 742% | 2,015,924 | 323% |
Net Asset value | 18,479,605 | 58% | 12,134,183 | 544% |
Basic Earnings per share | 4.90 | 742% | 5.63 | 323% |
Volume (Litres'000) | ||||
Raw milk utilised | 28,506 | 4% | 28,506 | 4% |
Sales | 97,103 | 3% | 97,103 | 3% |
CHAIRMAN'S STATEMENT (CONTINUED)
OUTLOOK
The operating environment remains challenging. It is expected that globally, economic growth will be slow due to the overhang of the COVID-19 pandemic and the effects of disruption to global supply chains. A decline in global demand is anticipated to lower commodity prices, reducing the opportunities for the nation to benefit from its rich mineral reserves.
Erratic supply, high cost of quality water and electricity are expected to persist, increasing the cost of production, and disrupting operations. Management will continue to engage in strategic partnerships and explore initiatives for alternative energy models and efficient production methods.
Volume growth in 2023 will be underpinned by recently completed capital investment projects which include a third maheu (Pfuko) line, a drinking yoghurt (Yoggie) line and a third blow moulder for Steri milk bottles. In addition, a
DIVIDEND NOTICE TO SHAREHOLDERS
NOTICE IS HEREBY GIVEN THAT the Board of Directors of Dairibord Holdings Limited ("the Company") has declared a final dividend of ZWL1.00 per share amounting to ZWL358,000,858.00 in respect of the financial year ended 31 December 2022, payable in respect of all ordinary shares of the Company.
ACTION | DATE |
Announcement Date | 28 April 2023 |
Last Date to Trade Cum- Dividend | 16 May 2023 |
Share Trade Ex-Dividend | 17 May 2023 |
Last Record Date (LRD) | 19 May 2023 |
Payment Date | 31 May 2023 |
Dividend Per Share | ZWL 1.00 |
CHAIRMAN'S STATEMENT
INTRODUCTION
It is gratifying to commemorate the 70th anniversary of Dairibord Holdings Limited at a time when the future of the Zimbabwe dairy industry and the Company appears very bright. From the establishment of the Dairy Marketing Board in 1952, to commercialisation in 1994 and listing on the Zimbabwe Stock Exchange in 1997, Dairibord has remained resilient in the seasons of challenging economic and operating environment.
OPERATING ENVIRONMENT
The operating environment was arduous throughout the financial year under review, characterized by high inflation and currency volatility especially in the second half of the year.
Several monetary policy interventions, particularly regarding local currency, interest rates and money supply management were enacted in response to the escalating inflationary pressures. The result was a decrease in annual inflation in H2 from a peak of 285% in August, to close the year at 243.8%.
The negative consequences of extended lead times throughout supply chains, delays in disbursements from the foreign currency auction system and increased wages exerted pressure on costs and margins. Inconsistent supply of quality water and power negatively affected production and increased manufacturing costs.
Notwithstanding the turbulent operating environment, the Group recorded positive volume growth compared to prior year. This success was made possible by maintaining focus on diversifying and expanding product portfolios, implementing affordable pricing models and consistent review of the route-to-market strategies. All these efforts were further aided by ongoing investments in increased manufacturing capacity and capabilities.
PERFORMANCE
Raw Milk
Raw milk utilized for the year was 28.5 million litres, 4% above 2021 and representing 34% of the total intake by processors as we remained the leading milk processor.
The business aims to continuously grow volumes of high quality raw milk through our Milk Supply Development Unit (MSDU) by providing support to the farmers in critical areas which include feed formulation and nutrition, veterinary support, herd growth projects, input procurement facilities as well as sustainability and alternative energy options.
Sales Volume and Revenue
Sales volumes for the period grew 3% ahead of the same period last year, with Beverages and Foods categories delivering growth of 7% and 10% respectively and Liquid Milks declining by 7%. Contribution to total volume for Liquid Milks, Beverages and Foods was 28%, 62% and 10% respectively.
Domestic market sales volumes sold in US$ for the year were 50% (2021: 17%) and exports were 6% (2021: 5%) as the Group's regional footprint continues to grow.
The Group recorded inflation adjusted revenue of ZWL63.38 billion during the financial year under review, a 40% increase on the comparative period. Moderate volume growth and price adjustments to protect margins were the main drivers of revenue growth.
Profitability
The business experienced increased costs arising from imported inflation and pricing distortions from currency instability. Resultantly, cost of sales and overheads grew by 46% and 48.5% respectively.
The Group operating profit grew 154% to ZWL6.03 billion compared to ZWL2.37 billion reported last year. The operating profit margin for the period was 10% up from 5.24% in prior period.
At 1.69 billion, net finance charges for the period were higher than last year in both inflation and historical terms, driven by an increase in borrowings and higher interest rates during the second half of the year. Borrowings amounting to ZWL1.8 billion were invested in capital expenditure projects to increase production output and to fund long working capital cycles.
After accounting for finance charges, the Group posted a profit before tax of ZWL4.3 billion against 891 million in prior year..
SUSTAINABILITY
The Group continues to use the Global Reporting Initiative (GRI) methodology for overall sustainability as part of its commitment to ensure the sustainability of the company and stakeholders and as guidance for social responsibility. Over the years, we have adapted our sustainability reporting to reflect the Sustainable Development Goals (SDGs), proving our dedication and support for sustainable development in the way we conduct our business.
We are committed to corporate social responsibility, water management, energy efficiency and recycling of packaging materials, in line with global best practices.
new chilled water plant was installed at the Harare Rekayi Tangwena factory to optimize production capabilities.
The Group will continue to seek value-adding opportunities. We will leverage initiatives in raw milk production growth, our diversified product portfolio, effective pricing models and route- to-market strategies for sustained growth. Cost containment and cost reduction through improved productivity and efficiencies are also key focus areas to improve profitability.
DIVIDEND
The Board declared a final dividend of ZWL358,000,858 from 2022 profits. The dividend translates to ZWL1 per share. The dividend will be paid on or about 31 May 2023.
DIRECTORATE
Retirements
Mr. Antony Mandiwanza retired from the Company and board as its long-serving Group Chief Executive Officer with effect from 30 September 2022. In addition, Mrs Sibusisiwe Chindove (Busi) also retired from the board with effect from 2 June 2022.
Appointments
Ms Mercy Rufaro Ndoro was appointed to the position of Group Chief Executive Officer with effect from 1 October 2022. Prior to her appointment, Mercy was the Group's Finance Director. Mr. Bruce Henderson was appointed to the board as a non-executive director with effect from 1 August 2022.
I take this opportunity to thank Antony and Busi for their great service to the Company and wish Mercy and Bruce all the best in their new appointments.
APPRECIATION
On behalf of the Board, I would like to extend our most sincere appreciation to all our esteemed customers, business associates and stakeholders for their continued support of the business, particularly during these trying times. We applaud management and all staff for their commitment and dedication towards the success of the Company.
- Sachikonye Chairman
14 April 2023
Non -resident shareholders' tax and resident shareholders' tax will be deducted from the gross dividends where applicable.
By Order of the Board
M. Karimupfumbi
Acting Company Secretary
28 April 2023
AUDITOR'S STATEMENT
These abridged inflation-adjusted consolidated and separate financial statements should be read in conjunction with the complete set of the inflation-adjusted consolidated and separate financial statements for the year ended 31 December 2022.
The inflation adjusted consolidated and separate financial statements have been audited by Deloitte & Touche Chartered Accountants (Zimbabwe) ("Deloitte"), who have issued a modified opinion with respect to prior year valuation of investment property and property plant and equipment. The auditor's report on the inflation-adjusted consolidated and separate financial statements, from which these abridged inflation-adjusted consolidated and separate financial statements are extracted, is available for inspection at the Company's registered office.
The Engagement Partner responsible for the audit was Mrs Charity Mtwazi, PAAB Practice Certificate Number 0585.
28 April 2023
ABRIDGED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2022
AUDITED INFLATION ADJUSTED | *UNAUDITED HISTORICAL COST | ||||
2022 | 2021 | 2022 | 2021 | ||
Note | ZWL'000 | ZWL'000 | ZWL'000 | ZWL'000 | |
Revenue from contracts with customers | 63,301,322 | 45,238,658 | 45,576,241 | 10,626,166 | |
Investment property rental income | 75,943 | 39,382 | 54,937 | 9,253 | |
Revenue | 3 | 63,377,265 | 45,278,040 | 45,631,178 | 10,635,419 |
Cost of sales | (51,155,822) | (34,929,254) | (33,058,355) | (7,909,413) | |
Gross Profit | 12,221,443 | 10,348,786 | 12,572,823 | 2,726,006 | |
Other income | 574,562 | 60,277 | 853,361 | 36,659 | |
Other expenses | (410,470) | (126,854) | (211,340) | (8,743) | |
Selling and distribution expenses | (6,317,407) | (4,212,984) | (4,603,746) | (970,137) | |
Administration expenses | (5,048,129) | (3,438,983) | (4,248,377) | (753,611) | |
Allowance for expected credit losses | (12,740) | (39,104) | (12,740) | (11,036) | |
Monetary gain/(loss) | 5,024,164 | (216,939) | - | - | |
Operating profit | 6,031,423 | 2,374,200 | 4,349,981 | 1,019,138 | |
Finance costs | (1,718,316) | (1,493,810) | (1,604,305) | (343,126) | |
Finance income | 22,475 | 10,380 | 7,492 | 2,463 | |
Profit before tax | 4,335,582 | 890,770 | 2,753,168 | 678,475 | |
Income tax expense | 5 | (2,581,095) | (682,399) | (737,244) | (202,141) |
Profit for the year | 1,754,487 | 208,371 | 2,015,924 | 476,334 | |
Other comprehensive income | |||||
Other comprehensive income that will not | |||||
be reclassified to profit or loss | |||||
Revaluation of Land and Buildings | 5,745,588 | (1,076,883) | 9,505,564 | 331,510 | |
Deferred tax | (683,254) | 266,205 | (1,271,161) | (81,949) | |
Total other comprehensive income for | |||||
the year | 5,062,334 | (810,678) | 8,234,403 | 249,561 | |
Total comprehensive income for the year | 6,816,821 | (602,307) | 10,250,327 | 725,895 | |
Profit for the year attributed to: | |||||
Owners of the parent | 1,754,487 | 208,371 | 2,015,924 | 476,334 | |
Total comprehensive profit for the year | |||||
attributable to: | |||||
Owners of the parent | 6,816,821 | (602,307) | 10,250,327 | 725,895 | |
Earnings per share (cents) | |||||
Basic | 9 | 4.90 | 0.58 | 5.63 | 1.33 |
Diluted | 9 | 4.90 | 0.58 | 5.63 | 1.33 |
*The Historical numbers are supplementary.
ABRIDGED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2022
AUDITED INFLATION ADJUSTED | *UNAUDITED HISTORICAL COST | ||||
2022 | 2021 | 2022 | 2021 | ||
Note | ZWL'000 | ZWL'000 | ZWL'000 | ZWL'000 | |
Assets | |||||
Non-current assets | |||||
Property, plant and equipment | 18,454,264 | 11,561,422 | 12,704,596 | 1,709,835 | |
Investment property | 775,000 | 339,585 | 775,000 | 98,786 | |
Right of use asset | 222,985 | 148,165 | 167,913 | 29,552 | |
Intangible assets | 12,935 | 15,160 | 289 | 119 | |
Deferred tax asset | - | 31,235 | - | 10,207 | |
19,465,184 | 12,095,567 | 13,647,798 | 1,848,499 | ||
Current assets | |||||
Inventories | 8,664,516 | 5,303,287 | 6,978,445 | 1,246,042 | |
Prepayments | 694,310 | 760,782 | 641,874 | 195,659 | |
Trade and other receivables | 5,298,192 | 2,088,751 | 5,298,192 | 607,619 | |
Cash and cash equivalents | 1,832,252 | 689,096 | 1,832,252 | 200,458 | |
16,489,270 | 8,841,916 | 14,750,763 | 2,249,778 | ||
Total assets | 35,954,454 | 20,937,483 | 28,398,561 | 4,098,277 | |
Equity and liabilities | |||||
Equity | |||||
Share capital | 6,562 | 6,562 | 36 | 36 | |
Share premium | 252,903 | 252,903 | 1,380 | 1,380 | |
Revaluation reserve | 7,390,802 | 2,328,468 | 9,341,600 | 1,107,197 | |
Retained earnings | 10,829,338 | 9,074,852 | 2,791,167 | 775,245 | |
Total equity attributable to ordinary share- | |||||
holders | 18,479,605 | 11,662,785 | 12,134,183 | 1,883,858 | |
Non-current liabilities | |||||
Interest - bearing borrowings | 8 | 1,101,946 | 850,449 | 1,101,946 | 247,396 |
Share incentive liability | - | 195,987 | - | 57,013 | |
Financial guarantee liability | - | 24,993 | - | 7,271 | |
Lease liability | 168,320 | 52,485 | 168,320 | 15,268 | |
Deferred tax liability | 2,863,466 | 2,679,295 | 1,652,996 | 295,812 | |
4,133,732 | 3,803,209 | 2,923,262 | 622,760 | ||
Current liabilities | |||||
Trade and other payables | 7 | 10,926,141 | 3,544,588 | 10,926,141 | 1,031,122 |
Contract liabilities | 247,911 | 283,293 | 247,911 | 82,410 | |
Interest - bearing borrowings | 8 | 1,905,403 | 1,194,985 | 1,905,403 | 347,622 |
Lease liability | 49,896 | 27,854 | 49,895 | 8,103 | |
Bank overdraft | - | 320,912 | - | 93,354 | |
Dividend payable | 3,286 | 11,335 | 3,286 | 3,297 | |
Income tax payable | 208,480 | 88,522 | 208,480 | 25,751 | |
13,341,117 | 5,471,489 | 13,341,116 | 1,591,659 | ||
Total liabilities | 17,474,849 | 9,274,698 | 16,264,378 | 2,214,419 | |
Total equity and liabilities | 35,954,454 | 20,937,483 | 28,398,561 | 4,098,277 |
Directors: J. Sachikonye (Chairman), *M.R. Ndoro (Group Chief Executive), N. Chiromo, C.R.J. Hawgood, B. Henderson, R.P. Kupara, C. Mahembe, K.K. Naik. * EXECUTIVE
Registered Office: 1225 Rekayi Tangwena Avenue, Harare, Zimbabwe. Website: www.dairibord.com
AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED
31 DECEMBER 2022
ENDURABLE BUSINESS,
ENDURABLE BRANDS
ABRIDGED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2022
AUDITED INFLATION ADJUSTED | ||||||
Foreign currency | ||||||
Share | Share | Revaluation | translation | Retained | ||
Inflation Adjusted ZWL | Capital | premium | reserve | reserve | earnings | Total |
Balance on 1 January 2021 | 4,894 | 188,640 | 3,184,959 | (207,517) | 6,354,507 | 9,525,483 |
IAS 29 and IAS 21 correction | 1,668 | 64,263 | - | - | 3,065,291 | 3,131,222 |
Foreign currency conversion Reserve | - | - | - | 207,517 | (207,517) | - |
Dividends | - | - | - | - | (391,614) | (391,614) |
Profit for the year | - | - | - | - | 208,371 | 208,371 |
Revaluation of land and buildings | - | - | (810,677) | - | - | (810,677) |
Realisation of revaluation on property disposal | - | - | (45,814) | - | 45,814 | - |
Balance at 31 December 2021 | 6,562 | 252,903 | 2,328,468 | - | 9,074,852 | 11,662,785 |
Profit for the year | - | - | - | - | 1,754,486 | 1,754,486 |
Other comprehensive income | - | - | 5,062,334 | - | - | 5,062,334 |
Balance at 31 December 2022 | 6,562 | 252,903 | 7,390,802 | - | 10,829,338 | 18,479,605 |
*UNAUDITED HISTORICAL COST | ||||||
Foreign currency | ||||||
Share | Share | Revaluation | translation | Retained | ||
Historical ZWL | Capital | premium | reserve | reserve | earnings | Total |
Balance on 1 January 2021 | 36 | 1,380 | 859,517 | 17,124 | 362,245 | 1,240,302 |
Foreign currency conversion Reserve | - | - | - | (17,124) | 17,124 | - |
Dividends | - | - | - | - | (82,340) | (82,340) |
Profit for the year | - | - | - | - | 476,335 | 476,335 |
Revaluation of land and buildings | - | - | 249,561 | - | - | 249,561 |
Realisation of revaluation on property disposal | - | - | (1,881) | - | 1,881 | - |
Balance at 31 December 2021 | 36 | 1,380 | 1,107,197 | - | 775,245 | 1,883,858 |
Profit for the year | - | - | - | - | 2,015,922 | 2,015,922 |
Other comprehensive income | - | - | 8,234,403 | - | - | 8,234,403 |
Balance at 31 December 2022 | 36 | 1,380 | 9,341,600 | - | 2,791,167 | 12,134,183 |
ABRIDGED CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2022
AUDITED INFLATION ADJUSTED | *UNAUDITED HISTORICAL COST | ||||
2022 | 2021 | 2022 | 2021 | ||
Note | ZWL'000 | ZWL'000 | ZWL'000 | ZWL'000 | |
Operating activities: | |||||
Operating profit before tax | 4,335,582 | 890,770 | 2,753,167 | 678,475 | |
Adjusted to reconcile profit before tax to | |||||
net cash flows: | |||||
Depreciation of property, plant and equipment | 4 | 1,062,915 | 970,263 | 132,800 | 47,887 |
Depreciation of right of use asset | 76,328 | 24,106 | 28,560 | 4,786 | |
Amortisation of intangible assets | 2,940 | 26,574 | 79 | 124 | |
Profit on disposal of property, plant and | |||||
equipment | (18,228) | (11,902) | (14,103) | (4,005) | |
Gain on remeasurement of right of use asset | (72,551) | - | (109,681) | - | |
Profit on disposal of scrap | (16,104) | (17,982) | (11,740) | (4,115) | |
Finance income | (22,475) | (10,380) | (7,492) | (2,463) | |
Inventory written off | - | 13,637 | - | 3,967 | |
Impairment loss on trade and other receivables | 12,740 | 39,104 | 12,740 | 11,036 | |
Loan guarantee costs | 24,993 | 937 | 7,271 | 273 | |
Fair value (gain)/loss on investment property | (435,415) | 87,536 | (676,214) | (21,486) | |
Exchange loss | 11,865 | 39,318 | 11,865 | - | |
Finance costs | 1,718,316 | 1,493,810 | 1,604,305 | 343,126 | |
Non cash adjustment IAS 29 | (5,024,164) | 216,939 | - | - | |
Working capital changes | |||||
Increase in Inventories | (3,361,229) | (2,008,566) | (5,732,403) | (836,844) | |
Increase in trade and other receivables | (3,209,441) | (479,525) | (4,690,573) | (275,475) | |
Decrease/(Increase) in prepayments | 168,540 | 805,330 | (349,093) | 9,940 | |
(Decrease)/Increase in contract liabilities | (35,381) | - | 165,501 | - | |
Increase in trade and other payables | 7,381,554 | 1,768,689 | 9,895,018 | 756,385 | |
2,600,785 | 3,848,656 | 3,020,007 | 711,611 | ||
Income tax paid | (594,090) | (980,276) | (471,837) | (231,990) | |
Net cash flow from in operating activities | 2,006,695 | 2,868,380 | 2,548,170 | 479,621 | |
Investing activities | |||||
Purchase of plant and equipment | (1,811,397) | (1,059,012) | (1,547,850) | (279,843) | |
Purchase of intangible assets | (715) | - | (249) | - | |
Proceeds from sale of property, plant and | |||||
equipment | 78,468 | 98,689 | 78,468 | 19,132 | |
Finance income on effective interest rate method | 22,475 | 10,380 | 7,492 | 2,463 | |
Prepayments for plant and equipment | (102,069) | (50,063) | (97,123) | (44,029) | |
Net cash flows from investing activities | (1,813,238) | (1,000,006) | (1 559 262) | (302,277) | |
Financing activities | |||||
Lease liability principal repaid | (154,018) | (62,754) | (159,410) | (20,990) | |
Finance costs | (1,718,316) | (1,441,256) | (860,544) | (327,082) | |
Dividend paid | (12) | (363,626) | (12) | (79,439) | |
Repayments of borrowings | (1,853,750) | (2,877,080) | (1,853,750) | (711,180) | |
Proceeds from borrowings | 3,539,179 | 3,785,735 | 3,539,179 | 866,583 | |
Net cash flows (used)/from financing | |||||
activities | (186,917) | (958,981) | 665,463 | (272,108) | |
Net increase/(decrease) in cash and cash | |||||
Equivalents | 63,962 | 909,393 | 1,523,171 | (94,764) | |
Effects of exchange rate changes on cash and | |||||
cash equivalents | 1,457,528 | (1,677,674) | 70,777 | (3,809) | |
Cash and cash equivalents at 1 January | 368,184 | 1,136,465 | 107,104 | 205,677 | |
Cash and cash equivalents at 31 December | 1,832,252 | 368,184 | 1,832,252 | 107,104 | |
Comprising of | |||||
Cash and cash balances | 1,832,252 | 689,096 | 1,832,252 | 200,458 | |
Bank overdraft | - | (320,912) | - | (93,354) |
NOTES TO THE ABRIDGED FINANCIAL STATEMENTS
For the year ended 31 December 2022
1. Basis of preparation
The Group's financial statements, of which these abridged results are an extract, were prepared in accordance with the Companies and Other Business Entities Act (Chapter 24:31), International Financial Reporting Standards (IFRS) and the Zimbabwe Stock Exchange Regulations. The Group's financial statements have been prepared on a going concern basis.
The consolidated financial statements are based on the statutory records that are maintained under the historical cost convention, except for land and buildings and investment property that have been measured at fair value. The historical costs have been adjusted for the effects of applying International Accounting Standard (IAS 29) - 'Financial Reporting in Hyperinflationary Economies". The Group's financial statements for the year ended 31 December 2022 and the corresponding figures for previous periods have been restated for the changes in the general purchasing power of the functional currency, and as a result, are stated in terms of the measuring unit current at the end of the reporting period.
The consolidated financial statements are presented in Zimbabwean Dollars (ZWL), which is the Group's functional and presentation currency. The historical financial statements are presented as supplementary information and do not form part of the audited financial statements.
1.1 Hyper inflation
On 11 October 2019, the Public Accountants and Auditors Board (PAAB) issued a pronouncement on the application of IAS 29. This followed runaway inflation experienced in Zimbabwe. The pronouncement required that entities operating in Zimbabwe with financial periods ending on or after 1 July 2019 prepare and present financial statements in line with the requirements of IAS 29.
The Directors have made appropriate adjustments to reflect the changes in the general purchasing power on the Zimbabwe Dollar and for purposes of fair presentation in accordance with IAS29, these changes have been made on the historical cost financial information. The ZWL all items CPI was used in adjusting the historical financial statements for inflation. The ZWL CPI was obtained from the Reserve Bank of Zimbabwe website. Below are the indices and adjustment factors used up to December 2022:
Indices | Adjustment Factor | |
CPI as at 31 December 2022 | 13,672.91 | 1.00 |
CPI as at 31 December 2021 | 3,977.46 | 3.44 |
CPI as at 31 December 2020 | 2,474.51 | 5.53 |
1.2 Historical cost financial information
The historical cost financial information is shown as supplementary information. The information does not comply with the International Financial Reporting Standards in that it does not take into account the requirements of International Accounting Standard 29 - Financial Reporting for Hyperinationary Economies. Consequently, the auditor does not express an audit opinion on the historical financial information.
2. Significant accounting policies
Accounting policies are consistent with those used in the previous year with no significant impact arising from new and revised International Financial Reporting Standards applicable for the year ended 31 December 2022.
*The Historical numbers are supplementary.
Directors: J. Sachikonye (Chairman), *M.R. Ndoro (Group Chief Executive), N. Chiromo, C.R.J. Hawgood, B. Henderson, R.P. Kupara, C. Mahembe, K.K. Naik. * EXECUTIVE
Registered Office: 1225 Rekayi Tangwena Avenue, Harare, Zimbabwe. Website: www.dairibord.com
AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED
31 DECEMBER 2022
ENDURABLE BUSINESS,
ENDURABLE BRANDS
NOTES TO THE ABRIDGED FINANCIAL STATEMENTS (CONTINUED) | NOTES TO THE ABRIDGED FINANCIAL STATEMENTS (CONTINUED) |
For the year ended 31 December 2022 | For the year ended 31 December 2022 |
3. Segment information | AUDITED INFLATION ADJUSTED |
*UNAUDITED HISTORICAL COST
The Group is currently organised into business units for management purposes. The Group has 3 operating segments which management uses to monitor performance and therefore inform decision making and these are:
AUDITED INFLATION ADJUSTED | ||||||
Manufacturing | ||||||
and | Adjustments | |||||
distribution | and | |||||
(Zimbabwe) | Properties | Corporate | eliminations | Group | ||
ZWL | ZWL | ZWL | ZWL | ZWL |
4. Depreciation and amortisation
Depreciation of property, plant and equipment Depreciation of right of use asset Amortisation of intangible assets
2022 | 2021 | 2022 | 2021 |
ZWL'000 | ZWL'000 | ZWL'000 | ZWL'000 |
1,062,915 | 970,263 | 132,800 | 47,887 |
76,328 | 24,106 | 28,560 | 4,786 |
2,940 | 26,574 | 79 | 124 |
Year ended 31 December 2022 | |||||
Revenue | |||||
Revenue from contracts with external | |||||
customers | 63,301,322 | - | - | - | 63,301,322 |
Revenue from contracts with internal | |||||
customers | 1,384 | - | - | (1,384) | - |
Revenue from management services | |||||
and royalties | - | - | 1,068,917 | (1,068,917) | - |
Rental income -internal customers | - | 145,521 | - | (145,521) | - |
Rental income -external customers | - | 75,943 | - | - | 75,943 |
Total revenue | 63,302,707 | 221,464 | 1,068,917 | (1,215,822) | 63,377,265 |
Results | |||||
Depreciation and amortisation | 903,584 | 203 | 19,402 | 177,545 | 1,142,183 |
Operating profit | 3,283,408 | 119,054 | (411,596) | 3,040,557 | 6,031,423 |
Finance income | 15,516 | - | 1,082,583 | (1,075,624) | 22,475 |
Finance costs | 1,590,782 | - | 522,462 | (394,928) | 1,718,316 |
Segment profit/(loss) before tax | 1,708,142 | 499,151 | 148,525 | 1,979,764 | 4,335,582 |
Income tax | 2,445,959 | 372,754 | 84,090 | (321,708) | 2,581,095 |
Segment assets | 19,131,188 | 11,936,395 | 35,954,456 | (31,067,584) | 35,954,456 |
Segment liabilities | 17,868,526 | 623,646 | 2,718,207 | (3,735,529) | 17,474,850 |
Capital expenditure | 1,693,539 | - | 117,858 | - | 1,811,397 |
Year ended 31 December 2021 | |||||
Revenue | |||||
Revenue from contracts with external | |||||
customers | 45,238,658 | - | - | - | 45,238,658 |
Revenue from contracts with internal | |||||
customers | 1,845 | - | - | (1,845) | - |
Revenue from management services | |||||
and royalties | - | - | 817,609 | (817,609) | - |
Rental income -internal customers | - | 351,287 | - | (351,287) | - |
Rental income -external customers | - | 39,382 | - | - | 39,382 |
Total revenue | 45,240,503 | 390,669 | 817,609 | (1,170,741) | 45,278,040 |
Results | |||||
Depreciation and amortisation | 962,770 | 174 | 41,137 | 16,862 | 1,020,943 |
Operating profit | 3,232,896 | 329,016 | 303,550 | (3,863,087) | 2,374,200 |
Finance income | 35,783 | - | 848,378 | (873,780) | 10,380 |
Finance costs | 1,755,101 | - | 869,408 | (1,130,699) | 1,493,810 |
Segment profit/(loss) before tax | 2,087,349 | (1,059,177) | 383,624 | (521,025) | 890,770 |
Income tax | (1,318,677) | 13,643 | 53,851 | 1,933,583 | 682,399 |
Segment assets | 19,618,636 | 5,484,685 | 10,269,579 | (14,435,416) | 20,937,484 |
Segment liabilities | 8,992,745 | 251,938 | 1,731,170 | (1,701,154) | 9,274,698 |
Capital expenditure | 1,056,274 | 1,741 | 997 | - | 1,059,012 |
The transactions between operating segments are at arm's length.
The adjustments and eliminations columns relate to inter-segments transactions and balances which are eliminated on consolidation.
* UNAUDITED HISTORICAL COST | ||||||
Manufacturing | ||||||
and | Adjustments | |||||
distribution | and | |||||
(Zimbabwe) | Properties | Corporate | eliminations | Group | ||
ZWL | ZWL | ZWL | ZWL | ZWL | ||
Year ended 31 December 2022 | ||||||
Revenue | ||||||
Revenue from contracts with external | ||||||
customers | 45,576,241 | - | - | - | 45,576,241 | |
Revenue from contracts with internal | ||||||
customers | 1,384 | - | - | (1,384) | - | |
Revenue from management services | ||||||
and royalties | - | - | 782,843 | (782,843) | - | |
Rental income -internal customers | - | 80,128 | - | (80,128) | - | |
Rental income -external customers | - | 54,937 | - | - | 54,937 | |
Total revenue | 45,577,625 | 135,066 | 782,843 | (864,356) | 45,631,178 | |
Results | ||||||
Depreciation and amortisation | 88,480 | 109 | 11,775 | 61,075 | 161,439 | |
Operating profit | 4,173,468 | 106,112 | 606,146 | (535,746) | 4,349,980 | |
Finance income | 15,516 | - | 784,550 | (792,574) | 7,492 | |
Finance costs | 1,590,782 | - | 1,291,726 | (1,278,203) | 1,604,305 | |
Segment profit before tax | 1,709,423 | 109,864 | 98,969 | 834,911 | 2,753,167 | |
Income tax | 880,127 | (152,050) | 51,095 | - | 737,244 | |
Segment assets | 17,186,766 | 11,936,395 | 2,776,033 | (3,500,634) | 28,398,561 | |
Segment liabilities | 15,202,221 | 280,674 | 2,706,208 | (1,924,724) | 16,264,378 | |
Capital expenditure | 1,447,627 | - | 100,223 | - | 1,547,850 | |
Year ended 31 December 2021 | ||||||
Revenue | ||||||
Revenue from contracts with external | ||||||
customers | 10,626,166 | - | - | - | 10,626,166 | |
Revenue from contracts with internal | ||||||
customers | 480 | - | - | (480) | - | |
Revenue from management services | ||||||
and royalties | - | - | 195,807 | (195,807) | - | |
Rental income -internal customers | - | 80,129 | - | (80,129) | - | |
Rental income -external customers | - | 9,253 | - | - | 9,253 | |
Total revenue | 10,626,646 | 89,383 | 195,807 | (276,416) | 10,635,419 | |
Results | (28,297) | 52,798 | ||||
Depreciation and amortisation | 49,770 | 27,182 | 4,143 | (28,297) | 52,798 | |
Operating profit | 922,709 | 58,451 | 77,070 | (51,833) | 1,006,396 | |
Finance income | 8,274 | - | 196,954 | (202,765) | 2,463 | |
Finance costs | 418,850 | - | 201,779 | (277,503) | 343,126 | |
Segment profit/(loss) before tax | 502,061 | 80,856 | 72,654 | 22,905 | 678,475 | |
Income tax | 190,441 | 30,318 | 15,219 | (33,837) | 202,141 | |
Segment assets | 3,289,984 | 1,595,499 | 501,969 | (1,289,175) | 4,098,277 | |
Segment liabilities | 2,696,695 | 73,289 | 480,024 | (1,035,589) | 2,214,419 | |
Capital expenditure | 279,165 | 424 | 254 | - | 279,843 |
The transactions between operating segments are at arm's length.
The adjustments and eliminations columns relate to inter-segments transactions and balances which are eliminated on consolidation.
1,142,183 | 1,020,943 | 161,439 | 52,797 | |||
5. | Income tax | |||||
The major components of income tax are | ||||||
shown below: | ||||||
Current tax | 641,016 | 818,541 | 641,014 | 202,184 | ||
Prior period charge | - | 40,869 | - | 11,889 | ||
Deferred tax | 1,940,079 | (177,011) | 96,229 | (11,932) | ||
2,581,095 | 682,399 | 737,244 | 202,141 | |||
6. | Capital commitments | |||||
Authorised and contracted for | 74,736 | 388,497 | 74,736 | 113,014 | ||
Authorised but not contracted for | 1,976,413 | 2,885,576 | 1,976,413 | 839,416 | ||
2,051,149 | 3,274,073 | 2,051,150 | 952,430 | |||
7. | Trade and other payables | |||||
Trade payables | 9,253,602 | 2,809,083 | 9,253,602 | 817,164 | ||
Payroll accruals | 352,370 | 245,428 | 352,370 | 71,395 | ||
Employee bonus accrual | 276,408 | 39,936 | 276,408 | 11,617 | ||
VAT & VAT withholding tax payable | 299,806 | 94,161 | 299,806 | 27,391 | ||
Leave accrual | 124,412 | 87,582 | 124,412 | 25,478 | ||
Utilities accruals | 113,760 | 108,510 | 113,760 | 31,566 | ||
Audit fee accrual | 34,688 | 50,497 | 34,688 | 14,690 | ||
Interest accrued | 24,041 | 40,205 | 24,041 | 11,696 | ||
Other payables | 447,054 | 69,186 | 447,054 | 20,125 | ||
10,926,141 | 3,544,588 | 10,926,141 | 1,031,122 | |||
8. | Interest bearing borrowings | |||||
AUDITED INFLATION ADJUSTED | *UNAUDITED HISTORICAL COST | |||||
2022 | 2021 | 2022 | 2021 | |||
ZWL'000 | ZWL'000 | ZWL'000 | ZWL'000 | |||
Total borrowings: | ||||||
Current portion of borrowings | 1 905 403 | 1 194 985 | 1 905 403 | 347 622 | ||
Non-current portion of borrowings | 1 101 946 | 850 449 | 1 101 946 | 247 396 | ||
Total | 3 007 349 | 2 045 434 | 3 007 349 | 595 018 | ||
Maturity profile of borrowings | ||||||
Due within one year | ||||||
0-3 months | 1 631 140 | 455 864 | 1 631 140 | 132 611 | ||
3-6 months | 100 387 | 739 121 | 100 387 | 215 011 | ||
6-12 months | 173 876 | - | 173 876 | - | ||
Total due within one year | 1 905 403 | 1 194 985 | 1 905 403 | 347 622 | ||
Due after one year | ||||||
1-5 years | 1 101 946 | 850 449 | 1 101 946 | 247 396 | ||
Total due after one year | 1 101 946 | 850 449 | 1 101 946 | 247 396 |
The bank loans are secured against land and buildings valued at 10 billion and the average cost of borrowings was 110%.
9. Earnings per share
Basic earnings per share amounts are calculated by dividing net profit for the year attributable to owners of the parent by the weighted average number of ordinary shares outstanding during the year.
Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.
The following reflects the income and share data used in the basic and diluted earnings per share computations:
AUDITED INFLATION ADJUSTED | *UNAUDITED HISTORICAL COST | |||
2022 | 2021 | 2022 | 2021 | |
ZWL'000 | ZWL'000 | ZWL'000 | ZWL'000 | |
Profit attributable to ordinary equity | ||||
holders of the parent for basic earnings | 1,754,487 | 208,371 | 2,015,924 | 476,334 |
2022 | 2021 | 2022 | 2021 | |
No. | No. | No. | No. | |
Weighted average number of ordinary shares | ||||
for basic earnings per share | 358,000,858 | 358,000,858 | 358,000,858 | 358,000,858 |
Number of shares in issue | 358,000,858 | 358,000,858 | 358,000,858 | 358,000,858 |
Weighted average number of ordinary shares | ||||
for diluted earnings per share | 358,000,858 | 358,000,858 | 358,000,858 | 358,000,858 |
Earnings per share (ZWL) | ||||
Basic | 4.90 | 0.58 | 5.63 | 1.33 |
Diluted | 4.90 | 0.58 | 5.63 | 1.33 |
There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of completion of these financial statements.
*The Historical numbers are supplementary.
Directors: J. Sachikonye (Chairman), *M.R. Ndoro (Group Chief Executive), N. Chiromo, C.R.J. Hawgood, B. Henderson, R.P. Kupara, C. Mahembe, K.K. Naik. * EXECUTIVE
Registered Office: 1225 Rekayi Tangwena Avenue, Harare, Zimbabwe. Website: www.dairibord.com
AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED
31 DECEMBER 2022
ENDURABLE BUSINESS,
ENDURABLE BRANDS
NOTES TO THE ABRIDGED FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2022
10. Headline earnings basis, ("HEPs")
Headline earnings comprise of basic earnings attributable to equity holders of the parent adjusted for profits, losses and items of a capital nature that do not form part of the ordinary activities of the Group, net of their related tax effects and share of non-controlling interests as applicable. The Group has presented HEPs in line with the guidance issued by South Africa Institute of Chartered Accountants, ("SAICA") Circular 1/21 in the absence of similar guidance on the local market."
NOTES TO THE ABRIDGED FINANCIAL STATEMENTS (CONTINUED)
For the year ended 31 December 2022
11. Prior year correction (continued)
*UNAUDITED HISTORICAL COST | |||
Previously | Adjustment | Nature of change where | |
GROUP | Presented | Impact | Restated applicable |
The following reflects the income and share data used in the headline earnings per share computations:
AUDITED INFLATION ADJUSTED | *UNAUDITED HISTORICAL COST | ||||
2022 | 2021 | 2022 | 2021 | ||
ZWL'000 | ZWL'000 | ZWL'000 | ZWL'000 | ||
Profit attributable to ordinary equity | |||||
holders of the parent for basic earnings | 1,754,487 | 208,371 | 2,015,924 | 476,334 | |
Profit on disposal of property, plant and | |||||
equipment | (18,228) | (11,902) | (14,103) | (4,005) | |
Profit on disposal of scrap | (16,104) | (17,982) | (11,740) | (4,115) | |
Lease remeasurement gain | (72,551) | - | (109,681) | - | |
Fair value adjustment on investment property | (435,415) | 87,536 | (679,625) | (21,486) | |
Tax effect | 134,056 | (14,252) | 201,505 | 7,319 | |
Profit attributable to ordinary equity | |||||
holders of the parent for Headline earnings | 1,346,245 | 236,097 | 1,402,280 | 236,097 | |
2022 | 2021 | 2022 | 2021 | ||
No. | No. | No. | No. | ||
Weighted average number of ordinary shares | |||||
for basic earnings per share | 358,000,858 | 358,000,858 | 358,000,858 | 358,000,858 | |
Number of shares in issue | 358,000,858 | 358,000,858 | 358,000,858 | 358,000,858 | |
Weighted average number of ordinary shares | |||||
for diluted earnings per share | 358,000,858 | 358,000,858 | 358,000,858 | 358,000,858 | |
HEPS | 3.76 | 0.66 | 3.92 | 0.66 |
There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of completion of these financial statements.
11. Prior year correction
During the year ended December 31, 2022, the Group reassessed the relevance and reliability of the presentation of some items in the statement of profit or loss to an understanding of the Group's financial performance. Based on the reassessment, the Group determined that the presentation of the identified items were no longer appropriate for inter-period comparability as there had been a mixture of the classification by both nature and function in the accounts. The Group has retrospectively applied this change in presentation to its financial statements for the year ended December 31, 2022.
The change in presentation relates to the following:
ITEM | CHANGE |
Fair value gain/loss on investment | Now presented under other income |
properties | |
Exchange gains | Now presented under other income |
To be further disaggregated into the following in other income note to | |
enhance an understanding of the nature of the income and expenses: | |
- Realised exchange gains; and | |
- Unrealised exchange gains. | |
Exchange losses | Now presented under other expenses to fully comply with the Group's |
presentation of expense classification function. | |
To be further disaggregated into the following in other expenses note | |
to enhance an understanding of the nature of the income: | |
- Realised exchange losses; and | |
- Unrealised exchange losses. | |
Net monetary gain/(loss) | Now presented as part of operating profit |
The change in presentation has been applied retrospectively and has an impact on the Group's reported operating profit but not the net profit for the year ended December 31, 2021.
As a result of the change, the comparative figures for the year ended December 31, 2021, have been restated to reflect the new presentation. The impact of the change on the comparative figures for the year ended December 31, 2021, is as follows:
AUDITED INFLATION ADJUSTED | ||||
Previously | Adjustment | Nature of change where | ||
GROUP | Presented | Impact | Restated applicable | |
Gross Profit | 10 348 786 | - | 10 348 786 | |
Fair value and exchange | ||||
losses reallocated to comply | ||||
with the Group's presentation | ||||
of expense classification by | ||||
Other income | - | 60 279 | 60 279 | function. |
Fair value and exchange | ||||
losses reallocated to comply | ||||
with the Group's presentation | ||||
of expense classification by | ||||
Other expenses | - | (126 854) | (126 854) | function. |
Selling and distribution expenses | (4 212 984) | - | (4 212 984) | |
Administration expenses | (3 438 983) | (3 438 983) | ||
Allowance for expected credit | ||||
losses | (39 104) | - | (39 104) | |
Now presented as a part of | ||||
Monetary gain/(loss) | - | (216 939) | (216 939) | operating income |
Operating profit/loss | 2 717 993 | (343 793) | 2 374 200 | |
Reallocated and presented | ||||
Fair value (loss)/gain on | under Other operating income/ | |||
investment properties | (87 536) | 87 536 | - | (expenses) |
Reallocated and presented | ||||
under Other operating income/ | ||||
Exchange (loss)/gain | (39 318) | 39 318 | - | (expenses) |
Now presented as a part of | ||||
Net monetary (loss)/gain | (216 939) | 216 939 | - | operating income |
Finance costs | (1 493 810) | - | (1 493 810) | |
Finance income | 10 380 | - | 10 380 | |
Profit before tax | 890 770 | - | 890 770 |
Gross Profit | 2 726 006 | - | 2 726 006 | |
Fair value and exchange | ||||
losses reallocated to comply | ||||
with the Group's presentation | ||||
of expense classification by | ||||
Other income | 15 174 | 45 105 | 60 279 | function. |
Fair value and exchange | ||||
losses reallocated to comply | ||||
with the Group's presentation | ||||
of expense classification by | ||||
Other expenses | - | (126 854) | (126 854) | function. |
Selling and distribution expenses | (970 137) | (970 137 ) | ||
Administration expenses | (753 611 ) | - | (753 611) | |
Allowance for expected credit | ||||
losses | (11 036) | - | (11 036) | |
Operating profit | 1 006 396 | 12 742 | 1 019 138 | |
Reallocated and presented | ||||
Fair value (loss)/gain on invest- | under Other operating income/ | |||
ment properties | 21 485 | (21 485) | - | (expenses) |
Reallocated and presented | ||||
under Other operating income/ | ||||
Exchange (loss)/gain | (8 743) | 8 743 | - | (expenses) |
Finance costs | (343 126) | - | (343 126) | |
Finance income | 2 463 | - | 2 463 | |
Profit before tax | 678 475 | - | 678 475 |
12. Events after the reporting date
After the reporting date, the Board of directors declared a final dividend of ZWL358,000,858 from 2022 profits on the 14th of April 2023. The dividend translates to ZWL1 per share. The dividend will be paid on or about 31 May 2023. There were no other significant events subsequent to the reporting period that may have an adjusting impact to these financial statements.
*The Historical numbers are supplementary.
Serving goodness for 70 years
We have been a part of many Zimbabwean households, for 70 years. From a cup of tea in the morning, to a delectable dessert in the evening and every moment
in between. We have been a part of life's happy and enjoyable moments, the sad ones too.
We look forward to playing the same role for the next 70 years and more.
Let's celebrate 70 years, together.
Directors: J. Sachikonye (Chairman), *M.R. Ndoro (Group Chief Executive), N. Chiromo, C.R.J. Hawgood, B. Henderson, R.P. Kupara, C. Mahembe, K.K. Naik. * EXECUTIVE
Registered Office: 1225 Rekayi Tangwena Avenue, Harare, Zimbabwe. Website: www.dairibord.com
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Dairibord Zimbabwe (Private) Ltd. published this content on 28 April 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 April 2023 10:47:07 UTC.
