African meat group Zambeef (LON:ZAM) said other assets are on the chopping block after it sold its soybean division Zamanita earlier this year.
The company, which operates in Zambia, Nigeria and Ghana, said with its full-year results that it was looking at ways to reduce its net debt.
Jacob Mwanza, chairman, said the sale of Zamanita resulted in net debt, in US dollar terms, reducing by 39%, or US$46mln, and that Zambeef will continue to explore offloading some of its non-core businesses and assets.
This “will allow us to unlock value and capital gains from within the group, and thereby reduce debt further,” he said.
The sale of Zamanita reduced the firm’s net debt to US$72.3mln at 30 September, from US$118.5mln on the same date the year before.
Broker VSA Capital said it “expects further disposals in line with this strategy in the coming year.”
Revenues rose 4.4% over the year, despite the sale of Zamanita, to US$220.2mln.
Adjusted pre-tax profit was slightly lower than the previous year, down 2% to US$1.6mln from US$1.63mln as the firm was hit by severe foreign exchange headwinds.
“Despite significant macro-economic challenges, the group's performance was commendable,” Mwanza said.
Pre-tax profit before the exchange losses rocketed some 590% to US$15.1mln from US$2.1mln the year before.
VSA Capital, said: “Market conditions have been extremely tough this year for Zambeef, not least because of the 50% depreciation in the year to date of the Zambian Kwacha against the US dollar.”
The broker added the switch to cold-chain food products and improvements in its operations are being overlooked due to the lofty forex hit and stripping those out the results were ahead of its expectations.