Zambeef trades in line, warns of FX headwinds

4th May 2020 08:53

(Sharecast News) - Cold foods retailer Zambeef forecast 2020 results in line with market expectations despite uncertainty caused by the Covid-19 pandemic, but warned cautioned that forex headwinds would hit adjusted pre-tax profits.


Zambeef said on Monday that full-year revenues, underlying earnings and pre-tax profits were relatively stable as the group's products in-country had, to date, stood up well.

The AIM-listed group expects the performance to continue through the second half of the year but noted that the Zambian economy had taken a serious hit over the last quarter due to the viral outbreak.

"The Zambian economy has been under significant fiscal pressures over the last three months due to reduced demand for copper caused primarily by the current global Covid-19 pandemic, and this has led to a sharp depreciation of the local currency in recent weeks," said Zambeef.

"This depreciation, in turn, impacts certain input costs into the business, as well as realising foreign exchange losses on our foreign currency-denominated debt."

As a result, Zambeef warned that pre-tax profits would still be negatively impacted once FX headwinds were factored in.

As of 0850 BST, Zambeef shares had slid 9.59% to 6.56p.