Full Year Trading Update

Zambeef (AIM: ZAM), the fully integrated cold chain foods and retail business with operations in Zambia, Nigeria and Ghana provides the following update on trading.

The Group announces that, for the year ended 30 September 2024 (all amounts in USD), revenue, adjusted EBITDA, adjusted and reported PBT are all anticipated to be in line with current market expectations due to underlying operational performance, despite a challenging economic and operating environment. Pleasingly, adjusted and reported profit after tax is expected to be higher than current market expectations, benefiting from a reduced tax impact for reasons including the benefit of the Group restructuring as announced in September 2023.

The macroeconomic conditions leading up to September 2024 were characterized by difficult operating circumstances, including, as previously announced, a severe drought and reduced consumer spending, compounded by the Central Bank's tightening monetary policy to address inflationary risks and constrained government spending. These factors significantly limited kwacha liquidity in the economy, leading to lower-than-expected demand for our products. The outbreak of Anthrax restricted cattle movement and negatively impacted public perception, slowing beef volumes in the first quarter. However, we saw a recovery in beef volumes, as bans on animal movement were lifted, from the second to the fourth quarter due to improved availability.

Furthermore, diminished water levels impacted Zambia's hydropower generation which accounts for 85% of the country's electricity. The government initiated an aggressive countrywide load management program that necessitated the use of more expensive alternative energy sources.

This, along with the sustained devaluation of the local currency from K21.02/USD at the beginning of the financial year to K26.54/USD at the end of the period along with an average inflation rate rising to 15.6%, contributed significantly to the high input and overhead costs.

Despite these challenges, the business remained focused on its primary strategy of revenue enhancement, cost optimization, and volume growth.

The Group expects its results for the financial year ended 30 September 2024 to be released by the end of December 2024. Shareholders are advised that the information contained in this Trading Update has not been reviewed nor reported on by the Company's external auditors.

* Adjusted EBITDA, adjusted profit before tax and adjusted profit after tax exclude the cost of the expected impairment in full (c.USD1.4m), as previously disclosed in the Company's announcement of 23 April 2024, of the investment in an associate (Zampalm) in which the Group owns a 10% equity interest, and which remains in operation. In addition, adjusted profit after tax also excludes the loss from assets held for sale (Chiawa Farm).