OPERATING ENVIRONMENT
The third quarter was marked by continued macroeconomic stability, although liquidity remained tight, particularly in local currency, due to the central bank’s monetary policies. Inflation and the exchange rate held steady, stabilizing trading activities and pricing models. A strong 2025/2026 agricultural season supported rural liquidity and food security.
While overall power supply improved, faults and prolonged downtime impacted production sites, constraining operating efficiency.
Globally, Middle East tensions drove volatility in fuel and imported input costs, keeping distribution, raw material and packaging costs elevated. Market competition intensified, with new entrants in selected categories and continued pressure from formal and informal domestic players and imports. Raw milk supply remained a constraint, although improving collections lifted Liquid Milks growth in the quarter.
BUSINESS PERFORMANCE
Q3 Performance
Raw milk intake remained unchanged year-on-year, at 11.8m litres and 32.1m litres for the Q3 and the 9-month period respectively.
Q3 sales volume growth moderated relative to the 26% growth recorded in the first half of the year. An extended cold spell in July slowed beverage offtake, while scheduled downtime on the bottled Cascade production line also constrained performance.
– Sales Volume: Total sales volume for the quarter grew 18% year-on-year to 41.58 million litres, with growth recorded across all product categories.
– Revenue: Quarterly revenue rose 22% to US$44.65 million.
– Portfolio Volume Performance:
» Liquid Milks (+15%): Supported by increased throughput from the Chipinge Steri plant, despite ongoing raw milk supply constraints.
» Beverages (+20%): Performance benefited from recent capital investments in bottled Cascade and Pfuko Maheu lines.
» Foods (+18%): Driven by robust consumer demand, particularly in yoghurt and ice cream lines.
Beverages accounted for 66% of Q3 volume, followed by Liquid Milks (24%) and Foods (10%).
Nine- Month Cumulative Performance
– Sales Volume: 9-month sales volume reached 119.85 million litres, representing a 23% increase over the prior year.
– Revenue: 9-month revenue grew 26% to US$127.12 million.
– Portfolio Volume Performance: Led by Beverages (+28%) and Foods (+26%), with Liquid Milks up 10%.
Beverages accounted for 67% of total volume, followed by Liquid Milks at 23% and Foods at 10%.
Export volume decreased 23% year-to-date as the Group deliberately prioritized fulfilling strong domestic demand. As capacity improves, exports will be a key focus area for foreign currency generation and risk diversification.
OUTLOOK
New investments will continue to support volume growth into the fourth quarter, alongside anticipated improvements in raw milk intake from large commercial farmers.
Persistent Middle East tensions will drive up input costs, particularly for petroleum- based packaging and freight for imported materials, exerting pressure on margins.
To counter margin pressure, management continues to execute key cost-efficiency initiatives, including utility self-sufficiency. Additionally, the commercialization of our innovation pipeline from the fourth quarter through to Q1 2027 will support market share gains.
By order of the Board
Maurice Karimupfumbi
Company Secretary
9 November 2026