OPERATING ENVIRONMENT
The first quarter was characterised by sustained economic resilience and improving business confidence, underpinned by stable output across key productive sectors. Fiscal and monetary policy measures contributed to the stabilisation of the Zimbabwe Gold (ZWG), resulting in a comparatively low-inflation environment versus the prior year period. Notwithstanding this progress, tight management of ZWG liquidity continued to constrain consumer spending, further reinforcing the predominance of US dollar-denominated transactions.
Utility supply remained unreliable during the period. Ongoing electricity shortages necessitated increased reliance on alternative energy sources, while certain production sites incurred additional costs from purchased water, collectively exerting upward pressure on operating expenses.
In addition, global geopolitical developments continued to disrupt supply chains, driving volatility in fuel, raw material, and packaging input costs. These pressures were compounded by extended lead times for imported inputs.
BUSINESS PERFORMANCE
Sales Volume and Revenue
The Group recorded strong volume growth of 26% in Q1 2026, driven by double-digit increases across all core product categories. The commissioning of the Chipinge Steri plant in December 2025 supported a 15% increase in Liquid Milks volume. Additionally, capital investments undertaken in Q4 2025 in bottled Cascade and Pfuko maheu contributed to a 29% growth in the Beverages category. The Foods segment achieved a 31% increase, underpinned by strong demand, particularly within the yoghurt category.
This performance reflects the Group’s strategic focus on capacity expansion and optimisation of its route-to-market initiatives. Product mix remained weighted towards Beverages (67%), followed by Liquid Milks (24%) and Foods (9%). Export volume declined by 40% year-on-year as the Group prioritised servicing increased domestic demand.
Revenue for the quarter amounted to US$39.40 million, representing a 26% increase compared to the same period in the prior year.
OUTLOOK
Heightened geopolitical tensions, particularly in the Middle East, are expected to sustain cost pressures in the near term. Volatility in global oil markets has increased distribution costs and the pricing of petroleum-based packaging materials. In a highly price- sensitive consumer environment, the Group’s ability to pass on cost increases remains constrained, posing potential margin pressures.
Despite these headwinds, the Group anticipates continued growth momentum into the second quarter, supported by improved product availability following recent capacity enhancements across key brands. Concurrently, management remains focused on strengthening operational efficiencies and enhancing cash generation.
By order of the Board
Maurice Karimupfumbi
Company Secretary
12 May 2026