Business / Economy
ZSE: Dairibord in 13% sell off after profit warning
19 Jun 2013 at 14:43hrs | Views
Dairibord fell 13% on Wednesday after the group warned that profitability for the half year to June will be lower than the comparable year ago period after the first quarter plant rationalisation disrupted product supply.
In the first quarter, management said performance was flat with turnover at $24.295 million from $24.226 million in the comparable year ago period. Volumes were down 1% to 16.046 million litres from 16.250 million litres while raw milk supply had grown by a marginal 1% to 6.622 million litres from 6.582 million litres.
At the close of traded Dairibord lost 4c to 25c with volume relatively strong at over 200 000. The counter had buyers at 23c and 27c. Management said the 1Q outturn was expected because of the rationalisation programme, the group undertook towards the end of last year.
"We had to move plant and equipment from Bulawayo and Mutare and in the process incurred costs in 1Q. The two factories had been mothballed." Also adding to the cost structure was the weakening of the SA rand against the US$.
However the rationalisation had been completed with the processing lines being reduced by two from 10 and normal production had resumed in April. Net savings of $1 million are expected over a 12-month period.
Losses in other heavyweight counters saw the wider market close in the red with a loss of 0.31% to 219.45. The Minings Index was unchanged at 72.97 with no trades recorded in the sector.
Delta pared 1c to 149c taking its market cap below the $1.8 billion mark and Innscor was also 1c lower at 99c on low volume. Banking counter CBZ was down 0.5c to 13.5c.
Penny stock PG Industries was the worst performer losing 0.2c (or 20%) to 0.8c as the group continues to implement recovery strategies.
There were gains however in Afre was up 0.5c to 16c and Fidelity added 1c to 14c taking its gain this year to 14c. PPC was up 2c to 255c but Willdale was the best performer gaining 0.07c (or 38.89%) to 0.25c.
Seedco added 1c to 86c amid reports the group will soon trade under a cautionary statement. Meikles rose 1.5c to 30.5c. Barclays added 0.49c to 5.5c as the counter continues with its fine run. The group has a year to date gain of 111.54%.
In the first quarter, management said performance was flat with turnover at $24.295 million from $24.226 million in the comparable year ago period. Volumes were down 1% to 16.046 million litres from 16.250 million litres while raw milk supply had grown by a marginal 1% to 6.622 million litres from 6.582 million litres.
At the close of traded Dairibord lost 4c to 25c with volume relatively strong at over 200 000. The counter had buyers at 23c and 27c. Management said the 1Q outturn was expected because of the rationalisation programme, the group undertook towards the end of last year.
"We had to move plant and equipment from Bulawayo and Mutare and in the process incurred costs in 1Q. The two factories had been mothballed." Also adding to the cost structure was the weakening of the SA rand against the US$.
However the rationalisation had been completed with the processing lines being reduced by two from 10 and normal production had resumed in April. Net savings of $1 million are expected over a 12-month period.
Delta pared 1c to 149c taking its market cap below the $1.8 billion mark and Innscor was also 1c lower at 99c on low volume. Banking counter CBZ was down 0.5c to 13.5c.
Penny stock PG Industries was the worst performer losing 0.2c (or 20%) to 0.8c as the group continues to implement recovery strategies.
There were gains however in Afre was up 0.5c to 16c and Fidelity added 1c to 14c taking its gain this year to 14c. PPC was up 2c to 255c but Willdale was the best performer gaining 0.07c (or 38.89%) to 0.25c.
Seedco added 1c to 86c amid reports the group will soon trade under a cautionary statement. Meikles rose 1.5c to 30.5c. Barclays added 0.49c to 5.5c as the counter continues with its fine run. The group has a year to date gain of 111.54%.
Source - Finx
