- …despite 33% dip in output for 2020
Indigenous food-processing company, Samba Foods, has set an ambitious target of growing its revenue by 25 per cent in the medium term, amid plans to procure new processing and packing equipment and expand its storage facilities, Managing Director, Leticia Osafo-Addo, has said.
She revealed this during an interaction with stakeholders at a Facts Behind the Figures session organised by the Ghana Stock Exchange (GSE), where she revealed that her outfit, in 2020, missed its projected output by 33 per cent, delivering 757,946 pieces of packaged sauces and spices versus the market demand of 1,136,919.
“The fall was as a result of the breakdown of the packaging machine, and not having adequate storage facilities,” she said, adding that the persistent increase in the prices of raw materials, particularly oil, which is imported, has been a major drawback.
Samba Foods grew its income by 80.32 per cent to GH¢ 492, 178 for the first half of the year, from GH¢272, 952 in 2019, whilst posting an Earnings Before Interest and Tax (EBIT) of GH¢1,239 from a sizeable loss of GH¢125,607 in the comparable period from the previous year.
This comes after a mixed bag of results for full-year (FY) 2020, which saw its gross profit margin drop to 24.9% from 32% year-on-year, despite revenue appreciating by 20% to GH¢ 672,907, from GH¢ 557,965 in FY 2019.
The performance was attributed to the disruptions brought about by the ongoing pandemic, with the Managing Director saying: “demand for our products reduced drastically due to economic uncertainty and changing consumer behaviour driven by COVID-19. Restriction on movement and social distance discouraged most consumers to patronise food services which takes the volumes of our products.”
“Our supply chain was disrupted due to government restrictions on movement. Suppliers were not able to meet our demands for raw material for production,” she added.
Cost of sales, driven primarily by overheads and the cost of raw materials saw a marginal decline from 57 per cent to 56 per cent in 2020.
Its performance remains primarily anchored on the demand for its ‘shito’ and ginger garlic paste.
Addressing concerns over the steady decline in share price, from a high of GH¢0.73 in 2015 – when it listed on the Ghana Alternative Market (GAX) – to a flat GH¢0.55 over the course of the last 25-odd months, as well as the non-payment of dividends.
Mrs Osafo-Addo stated that her outfit is primed for stronger performances, and subsequently payment of dividends.
“On account of the sales, as the economy bounces back and with improved technology, we are on course for stronger fundamentals. Increased storage capacity will ensure that we are less susceptible to the fluctuations in the prices of inputs, with, for instance, oil changing every six weeks,” she added.
The company projects it will produce over 1,200,000 pieces of sauces and spices in 2021.