The company has in the past battled to remit about $1.7m trapped inside the Zimbabwean economy in dividends.
Zimbabwe is struggling to contain a worsening liquidity crunch that has affected companies’ ability to pay off credit facilities and to pay for raw materials on time. National Foods is jointly owned by Tiger Brands and Harare-listed Innscor Africa, which has fast foods, maize and flour milling, snacks manufacturing, poultry and edible oils units under its portfolio. Tiger Brands has a stake of about 37percent in National Foods.
Full year revenues in National Foods dipped 12% to $289.5m, while headline earnings per share declined 4% to 20 cents after operating profit lowered 11% to $19.3m.
Despite the subdued performance, National Foods will declare 5.21 cents per share for the second half period, taking the total dividend payout for the full year period to 10.02 cents.
Volumes in the company were 10% down at 507000 tons, largely impacted by poor performance of the maize division.
Difficulties experienced by Zimbabwean companies to pay foreign shareholders have forced them to re-invest dividends into operations. Other companies that have failed to remit dividends to foreign shareholders on time include Delta Corporation and British American Tobacco as forex shortages worsen.
In spite of the difficulties had by National Foods, Innscor Africa - whose fast foods unit runs Nando’s, Chicken Inn, Steers and Pizza Inn counters in Zimbabwe and the region - raised operating profits from continuing operations for the full year period to the end of June by 19% to $65.5m, it said yesterday.
This translated to a 47percent surge in headline earnings per share to 4.74 cents.
Addington Chinake, the chairman of Innscor, said yesterday that the ability of the group “to manage its foreign creditor position going forward remains its primary risk” factor. On National Foods, he said: “While significant progress was made in reducing foreign creditor positions in the second half of the financial year, foreign credit terms tightened and the management of raw material flow and cost will thus remain critical focus areas.”
The company has also taken a knock from the outbreak of avian influenza at its poultry division, Irvine’s, which had to cull more than 200000 chickens and has resorted to importing hatching eggs to sustain operations.
A marked shortage of table eggs has also hit Zimbabwe.
- BUSINESS REPORT