Our most recent words on Zambia-based foods processor Zambeef (ZAM) was that the various factors that had contrived to give the company a good kicking should unwind in its favour (2 April 2014). Kicker-in-chief was currency. The weakness of Zambia’s kwacha hurt a company whose costs, with the exception of labour, are skewed towards US dollars.
True to form, the Zambian currency stabilised in the second half of the year to end September. Other bearish factors eased too – an outbreak of African swine fever in Zambia came under control and the effects of selling imported contaminated meat faded from consumers’ memories. Meanwhile, the company benefited from a good wheat harvest. All of this means losses for the year will be less than City analysts had expected.
