(Alliance News) - Zambeef Products PLC said on Wednesday that earnings per share will suffer as the company's poultry distributor Zamchick is predicted to be impaired.

The Lusaka, Zambia-based beef producer said in a trading statement that EPS is expected to be 83% lower for the year ended September 30 than for financial 2021 in kwacha terms, due to the expected impairment of Zamchick.

Zambeef Products says Zamchick will be impaired in full in the group's financial 2022 results for a USD8.3 million loss.

The company announced on November 10 that revenue, adjusted earnings before interest, taxes, depreciation, and amortization and pretax profit are expected to be in line with market expectations. Adjusted pretax profit is expected to be 10% ahead of market expectations.

Reported profit is also expected to be affected by an impairment loss, while the outlook for revenue and adjusted profit remains the same.

"The expected impairment reflects a reduction in the board's expectations of Zamchick's future economic performance," the company said.

Zamchick was profitable in financial 2022, and is expected to remain profitable in financial 2023.

Zambeef's performance in Cropping, Milling, and Stockfeed allowed the company to achieve adjusted earnings before interest, taxation, depreciation and amortisation in line with expectations "owing to high grain prices, market share gains, and cost containment," Zambeef said.

The company also highlighted that "the period saw an escalation in key input prices such as fuel, chemicals, and fertiliser which impacted margins. In addition, the Group saw outbreaks of contagious bovine pleuropneumonia and African swine fever, both of which were successfully managed."

Zambeef shares were down 3.0% trading at 8.00 pence each on Wednesday afternoon in London.

By Harvey Dorset; harveydorset@alliancenews.com

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