Food and dairy products processor, Dairibord Holdings Limited, says sales volumes for the third quarter to September 30, 2020 significantly improved registering a 32 percent growth on previous quarter as the lockdown restrictions eased.
Year-to-date foreign currency revenue also improved 50 percent compared to same period last year.
In a trading update, the group indicated that demand significantly improved in the third quarter subsequently pushing volumes up.
Accordingly, growth was recorded across all product categories with liquid milks, foods and beverages growing by 15, 74 and 50 percent respectively.
“The operating environment for the three months to September 30, 2020, showed improvement on the back of foreign currency exchange rate stability, reduced month-on-month inflation and relaxation of the Covid-19 lockdown restrictions.
“The introduction of the foreign currency auction system and Statutory Instrument 185 of 2020, improved foreign currency availability and stability resulted in enhanced planning, efficiency and value preservation. Although the impact of the Covid-19 continues to disrupt both local and regional markets, increased trading hours and reopening of trading channels, resulted in overall improvement in aggregate demand,” revealed Dairibord.
Volumes for the quarter were however, 10 percent below the same quarter last year showing a recovery compared to the 46 percent decline recorded in Q2 2020 versus Q2 2019. While cumulative sales volumes remained below 2019 at 26 percent down, the trajectory shows a recovery from the 32 percent decline recorded in H1.
Revenue for the quarter in inflation adjusted terms, was 43 percent above prior quarter and 8 percent above the same quarter last year. Year-to-date revenue was 8 percent below the same period in 2019 and the cumulative reduction is on account of depressed H1 performance. During the half year, sales volumes were 32 percent below same period in the prior year.
According to Dairibord, year-to-date operating margins increased to 8 percent compared to 6 percent in 2019.
Foreign currency liabilities closed the period at US$0,771 million (including a long term loan of US$0,302 million) down 34 percent 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 2019,” said Dairibord.
Going forward, management is upbeat of maintaining the improved performance achieved in the quarter into the final quarter of 2020 as the local and regional economies show signs of recovery.
Dairibord said: “The business is geared to exploit opportunities presented in a more stable operating environment by mitigating supply chain disruptions and taking full advantage of weather induced demand.”