Business Reporter
COLCOM Holdings plans to increase pig production at its auxiliary unit from 300 to 450 pigs per week through identification of suitable piggeries. Group chairman, John Koumides, said in a statement accompanying company’s abridged financial results for the half year ended December 31, 2015, that the firm was strategically positioned for growth.
“In line with Colcom’s strategy to increase pig production capacity, the auxiliary pig unit is expected to increase production from 300 to 450 pigs per week from March 2016.
“Further expansion will be considered on the identification of suitable piggeries,” he said.
Koumides said the group had also made strategic pricing decisions aimed at yielding volume growth to boost revenues and enhance production efficiencies.
During the period under review, Colcom recorded revenue of $30,57 million, which was a nine percent decline against the comparable prior period.
Within that result, the group also recorded a seven percent drop while its subsidiary, Associated Meat Packers, recorded a 13 percent decrease in revenue.
Koumides said efficiencies in procurement, assisted in part by a weakening South Africa rand, have been passed on to customers through sales price reductions.
“Ongoing cost cutting initiatives have achieved a saving in operating expenses of eight percent against the comparative period.
These cost savings helped mitigate the effect of lower revenues resulting in operating profit of $4,49 million being posted,” he said.
The group, during the period under review, generated $0,38 million in cash from operating activities after investing $4,3 million in working capital.
This includes an increase of $1,90 million in stock, predominantly through an investment in a strategic reserve of maize, a seasonal increase in trade debtors of $1,2 million and 40,54 million in current biological assets through the growth of pig livestock herd.
The group also invested $1,39 million in capital expenditure and paid out $2,98 million in dividends during the period to retain a cash balance of $3,73 million.
On the overall side, Colcom Foods increased volumes by two percent. However, the shift in sales mix from processed to fresh meat combined with strategic pricing decisions initiated by management resulted in a lower revenue figure.
“Within the AMP business, sales volumes declined by 10 percent against the comparative prior period.
The volume decline is directly linked to low consumer demand resulting from tight liquidity in the market.
The group’s pig production unit, Triple C Pigs yielded excellent results and efforts to increase the number of pigs produced internally through auxiliary products units yielded a growth of 26 percent against the comparative period, directly in line with expectations,” said Koumides.