Business - Companies & Markets - Local - November 4, 2020

Diaribord Holding’s forex revenue up by a whopping 50%

By Staff Reporter

LISTED food and milk processor Diariord Holdings Limited managed to generate foreign currency revenue of up to 50% since 2019 this was revealed in a financial update ending 30 September 2020.

In a statement by the company secretary, Mr Samson Punzisani said the company managed to generate enough currency to even pay back outstanding loans and other outstanding foreign currency liabilities, since last year.

“The drive to generate foreign currency revenue and contribute towards the company’s foreign currency requirements continued to bear fruit with year to date foreign currency revenue up 50% from 2019.

“Foreign currency liabilities closed the period at US$0. 771 million (including a long term loan of US$0.302 million) down 34% from US$1.161 million at the end of June 2020. The short term liabilities were partly covered by foreign currency cash balances and expected receipts of US$0.312 million.

“The Group remains sufficiently liquid with a current ratio of 1.55. Focus on optimising the cash management cycle saw the cash to credit ratio in September improve to 36:64 from 18:82 in December 201, said Punzisani.

The company attributed the availability of foreign currency due to the stable forex action system and also the operating environment for the Q3.

“The introduction of the foreign currency auction system and Statutory Instrument 185 of 2020 improved foreign currency availability and stability resulting in enhanced planning, efficiency and value preservation.

“The operating environment for the three months to 30 September 2020 showed improvement on the back of foreign currency exchange rate stability, reduced month on month inflation and relaxation of COVID-19 lockdown restrictions”, he adds.

Dairibord remains the processor with the highest raw milk intake and widest milk intake base in the country. The business focused on ensuring the viability of suppliers through various support initiatives including competitive prices to sustain long term milk supply growth.

Meanwhile, the company says it is still pursuing merger and acquisition negotiations with an unlisted entity and has warned shareholders to exercise caution when dealing in the company’s shares.

In the third quarter of last year, the group finalised the disposal of Dairibord Malawi and at the time of the disposal, liabilities of the subsidiary exceeded assets.

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