COVID-19 Impact to Show in Innscor’s Q4

Listed conglomerate, Innscor Limited, is likely to feel the impact of Covid-19 in the current quarter.

Zimbabwe imposed an initial level 5 lockdown from March 30, which has since been reduced to level 2 and extended indefinitely.

The group has said reduced human traffic, especially during the full phase of the lockdown had a negative impact on overall sales volumes during April.

“Whilst the group’s businesses have been classified as essential services during the Covid-19 lockdown, and have therefore been allowed to operate under certain conditions, the restrictions on people movement and business trading hours has resulted in a general decline in sales volumes across the Group’s network during most of April 2020,” said Innscor in third quarter trading update to March 31, 2020.

“An improvement in sales volumes has been recorded in early May 2020 following the slight easing of restrictions under the lockdown programme.”

The Covid-19 pandemic has disrupted international trade routes and economic activity across the world. But Innscor says its raw materials supply will not be severely affected, while local raw material supply will be carefully managed.

“Business units in the group typically operate with lengthy raw material pipelines and at this point management does not anticipate any major risks of disruption in raw material supplies as a result of Covid-19 control measures instituted in other parts of the world.

“As part of the group’s business continuity plan, Management continues to review financing, capital investment, and working capital levels.

“The group’s livestock herds are a critical component of its asset base, and production levels will be managed in the most efficient manner, and in line with market demand.”

During the third quarter, subsidiary Natfoods volumes were 14 percent below the comparative quarter.

But the volumes were, however, 21 percent above the volumes recorded in the second quarter of the current financial year.

Colcom’s volumes over the nine-month period to March 31, 2020 were 13 percent behind those recorded in the prior comparable period.

Natpak posted a 21 percent increase in overall volume growth for the nine-month period over the comparative period.

Irvine’s performance over the nine-month period under review was largely driven by the performance of the table egg category, which showed a 14 percent increase on the comparative period.

The group’s Bakery division’s performance weakened during the period under review, 40 percent from the previous comparable period. Going forward, the group sees high levels of uncertainty due to the Covid-19 pandemic.

“Given the ongoing uncertainty around the impact and conclusion of Covid-19, it is not possible to assess, with absolute certainty, the full impact it will have on the group’s financial performance for the year ending 30 June 2020.

“At the present time, the financial status of the group remains healthy, and the Covid-19 pandemic has not created any issues from a solvency or liquidity perspective,” said Innscor.

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