26 June 2025

Zambeef Products plc

("Zambeef" or the "Group")

Interim results for the half-year ended 31 March 2025

Zambeef (AIM: ZAM), the fully integrated cold chain food products ("CCFP") and retail business with operations in Zambia, Nigeria and Ghana, today announces its results for the half-year ended 31 March 2025. 

Financial Highlights

PERFORMANCE OVERVIEW

Zambeef delivered a resilient performance in the first half of FY25, demonstrating the strength of its core operations and the successful execution of its strategic priorities. This performance was achieved despite an operating environment marked by reduced consumer spending, rising input costs, currency depreciation, and persistent power supply challenges. Revenue increased by 12.5% in local currency, underpinned by pricing and volume growth, while gross profit rose by 26.2%, reflecting operational optimisation and a favourable product mix. However, when measured in US dollar terms, there was a year-on-year decrease of 3.1% in revenue, while gross profit increased by 8.7%.

The increase in EBITDA and Operating Profit further highlights the focus on protecting margins and enhancing productivity. Our core divisions continue to anchor the Group's financial strength, with strategic investments across key segments delivering positive returns. Our diversified and vertically integrated model remains a key differentiator, providing resilience and agility in navigating macroeconomic headwinds.

The decline in Group income for the half is primarily attributed to a significant increase in financing costs, driven by the debt levels and an escalation in the monetary policy rate, as well as increased income tax charges. These factors eclipsed the growth in operating profit recorded during the period.

OUTLOOK

Looking ahead, a forecast bumper harvest and improved summer crop yields will enhance the profitability of the Cropping division, while also injecting liquidity into the economy through increased earnings by small-scale farmers. Furthermore, improved rainfall is expected to support better electricity supply, offering a marginally improved economic outlook compared to the first half.

The Interim Report for the six-month period ended 31 March 2025 will be available today on the Group's website.

For further information, please visit www.zambeefplc.com or contact:

About Zambeef Products PLC

Zambeef Products plc is the largest integrated cold chain food products and agribusiness company in Zambia and one of the largest in the region, involved in the primary production, processing, distribution and retailing of beef, chicken, pork, milk, dairy products, fish, flour and stockfeed, throughout Zambia and the surrounding region, as well as Nigeria and Ghana.

It has 250 retail outlets throughout Zambia and West Africa.

The Company is one of the largest suppliers of beef in Zambia. Five beef abattoirs and three feedlots are located throughout Zambia, with a capacity to slaughter 230,000 cattle a year. It is also one of the largest chicken producers in Zambia, with a capacity of 10.6 million broilers and 31.2 million day-old chicks a year. It is one of the largest piggeries, pig abattoirs and pork processing plants in Zambia, with a capacity to slaughter 75,000 pigs a year, while its dairy has a capacity of 120,000 litres per day.

The Group is also one of the largest cereal row cropping operations in Zambia, with approximately 7,787 hectares of row crops under irrigation, which are planted twice a year, and a further 8,694 hectares of rainfed/dry-land crops available for planting. www.zambeefplc.com

CHAIRMAN'S REVIEW

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Dear Shareholder,

The Company's performance for the half-year period ending on March 31, 2025, was positive, despite Zambia's challenging macroeconomic conditions, which included high inflation and significant pressure on the local currency's exchange rate. Although the rainy season was relatively favourable, the expected benefits, particularly a reduction in grain prices, are anticipated to be realised in the second half of the year.

The depreciation of the Kwacha, combined with the widespread effects of the 2023/24 El Niño event, has increased the cost of essential inputs such as energy, grain, and imported materials. This rise in costs has put significant pressure on operating margins. To combat inflation and stabilize the exchange rate, the Bank of Zambia has maintained a tight monetary policy. While this approach is necessary, it continues to strain consumer spending and raise borrowing costs,

Despite this, Zambia's economy has demonstrated resilience, with a rebound expected to be supported by recovery in the mining and agriculture sectors, as well as policy reforms and infrastructure investments.

Resilient Performance in a Challenging Environment

Despite the challenges we faced, the Group stayed committed to its strategic objectives. By effectively implementing initiatives focused on maximising revenue, optimising costs, and enhancing operational efficiency, the Group achieved growth in operating profitability compared to the previous year. This performance highlights our resilience and demonstrates the strength of our vertically integrated business model, which continues to generate long-term value for our shareholders.

Strategy

The Board remains steadfast in its commitment to achieving the Group's strategic objectives, undeterred by seasonal market dynamics and economic fluctuations. Our five-year strategy is centered on the following key pillars:

§ Strengthening our core business: We are dedicated to bolstering our core business through targeted investments aimed at expanding our market share and solidifying our position in key sectors.

§ Human Capital Development: We recognise the importance of our workforce in driving organisational success. Thus, we are crafting a tailored human capital strategy to align with our organisational needs, ensuring that our employees are equipped with the skills and resources necessary to thrive in a dynamic environment.

§ Enhancing Strategic Partnerships: Strategic partnerships play a vital role in enhancing our competitive edge and market position. We are committed to strengthening these partnerships to capitalise on synergies and opportunities for growth.

§ Divestiture of Non-Core Assets: To optimise resource allocation and focus on our core business areas, we are actively pursuing the divestiture of non-core assets.

Progress on our $100 million expansion program, announced in 2022, is making significant strides. The expansion of the Mpongwe row cropping capacity has yielded positive results, with the third winter crop set to be planted in the upcoming winter season. The milling and hatchery facilities were successfully commissioned in October 2024, while the new cheese plant was completed and commissioned in April 2025.

Outlook

Zambia's macroeconomic outlook is cautiously optimistic. Key factors supporting growth include progress in sovereign debt restructuring, an anticipated easing of inflation starting in July 2025, improved rainfall, and increased trade activity. Additionally, initiatives for energy diversification, such as new investments in solar and coal, suggest improved supply stability in the medium term.

With our strong brand presence and integrated business model, the Group is well-positioned to capitalise on emerging growth opportunities and adapt to changing consumer dynamics.

We remain focused on strengthening the balance sheet, enhancing cash flow, and delivering long-term shareholder value.

British International Investment plc (BII)

BII is the Company's largest ordinary shareholder with 52.6 million ordinary shares and also 100,057,658 convertible redeemable preference shares ("Preference Shares") in Zambeef Products plc. The Company has the right to redeem all or part of the Preference Shares at the redemption price, which would give BII a 12% compounded annual return on their investment, subject to a minimum of USD 0.77 per share (less dividends received). However, the likelihood of such a repayment by the Company in this financial year, or in the medium term, is currently considered by the Board to be uncertain. The eighth anniversary (16 September 2024) of BII's investment in the Company materially increased BII's conversion rights on their Preference Shares from one-for-one new ordinary share, to one for 3.0833 (recurring) new ordinary shares.

Acknowledgement

Despite the challenges faced, we are confident in the Group's ability to navigate uncertainty. Our trusted brands, vertically integrated value chain, and prudent management position the Group well to seize emerging opportunities.

I would like to thank my fellow Board members for their dedicated leadership during the first half of the year. I also sincerely appreciate our hardworking management and staff for their continued commendable performance.

As we progress, we remain dedicated to sustainable growth, operational excellence, and providing value to our shareholders.

Patrick Wanjelani

Chairman