Zambeef Products saw its H1 pretax profit plunge to $590,000, from $6.8m a year earlier, as it was impacted by the challenging economic environment in Zambia and a major drop in soft commodity prices.
"Rising inflation, Exchange Rate volatility and rapidly increasing interest rates resulted in the Bank of Zambia being forced to introduce strict control measures in order to stabilise the economy," said chairman Jacob Mwanza.
"These measures, which included tight control of the money supply and high interest rates, have resulted in a slowdown in consumer spending," he said.
"However, as a consequence of these Government actions, inflation has reduced to single digit levels, the Kwacha has stabilised and the high interest rates we saw in the first half are starting to abate.
"As a result of these improving economic indicators, and downward price pressure on certain consumer food products, we expect the business environment and consumer demand to improve in the second six months of this financial year. Against this background, Zambeef is well placed to take advantage of the improving macroeconomic conditions.
"As reported at our 2016 Full Year results in November 2016, the principle focus of Zambeef for the foreseeable future will be on expanding our retailing and distribution footprint and on improving margins and restoring profitability.
"We will continue to expand the Cold Chain Food Production capacity to meet increasing consumer demand; complete the build out of the new stock feed plant at Mpongwe and continue to strengthen our balance sheet, through the disposal of non-core assets. While undoubtedly it is disappointing to report this first half performance I have full belief that the second half will see a return to more normal trading conditions and a much improved financial performance."
At 9:25am: (LON:ZAM) Zambeef Products PLC share price was -3.75p at 14.75p