DAIRY processor, Dairibord Holdings Limited, will sell 25 properties to raise US$4,12 million in capital expenditure for the current financial year as it moves to upscale its dairy production across beverage and food segments.
“In January 2024, the group issued mandates to four registered estate agents to facilitate the disposal of 25 of its properties which had been evaluated as excess to property requirements. The proceeds from the sale of these properties are meant to be utilised to finance planned capital expenditure that will see an upsurge in production and sales volumes,” Dairibord said in its annual report for the period ended December 31, 2023.
“The total value of the 25 properties at the date of the last valuation is US$4,12 million. As at the date of this report, one property has since been sold [Stand 335 Chiredzi] which had a book value of ZWL$850 000 000 and was sold for a total of ZWL$712 000 000 hence realising a loss of ZWL$138 000 000.”
Dairibord added: “Subsequent to year end, the assets designated for disposal were classified as non-current assets held for sale in line with the requirements of International Financial Reporting Standard 5. The assets held for disposal do not qualify for classification as a discontinued operation.”
In 2023, the group invested ZWL$8,7 billion as its capex in property, plant and equipment, down from a prior year comparative of ZWL$14 billion.
Capital investments and working capital were supported by borrowings with interest-bearing borrowings rising to ZWL$36,2 billion during the period under review. This was from a 2022 comparative of ZWL$23,3 billion.
This was mostly due to increases in working capital requirements brought on by volume growth and inflation.
The firm ended the period under review in a liquid position as it had ZWL$1,25 to every Zimdollar of short-term debt, an uptick from the prior year’s ZWL$1,23.
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Dairibord chairperson Josphat Sachikonye said the group was well-positioned to capitalise on emerging opportunities.
“As part of its growth strategy, the organisation will continue to explore avenues for expansion, both domestically and regionally, while ensuring a sustainable and responsible approach to business operations,” he said.
“The toll manufacturing project in South Africa is at an advanced stage and is anticipated to enhance foreign currency earnings and mitigate some risks associated with the group’s local operations.”
He added: “Raw milk supply growth and the capital investment drive will underpin the overall volume trajectory, with focus being deployed on expanding plant capacities, optimising manufacturing capabilities, maintaining financial discipline and investing in technology and innovation to enhance our product offerings.”
Sachikonye said considerable emphasis would also be placed on restructuring the balance sheet to preserve value.
