Dairibord Holdings Limited recorded a strong start to 2026 after achieving a 26 percent growth in sales volumes during the first quarter ended March 31, driven by increased demand across its key product categories and recent capacity expansion initiatives.

In its latest trading update, the group said the operating environment showed improving economic stability despite persistent liquidity constraints and rising production costs.

“The first quarter was characterised by sustained economic resilience and improving business confidence, underpinned by stable output across key productive sectors,” the company said.

The company noted that fiscal and monetary policy measures contributed to stabilisation of the Zimbabwe Gold currency, resulting in comparatively lower inflation during the period. However, constrained liquidity levels continued to weigh on consumer spending.

“Notwithstanding this progress, tight management of ZWG liquidity continued to constrain consumer spending, further reinforcing the predominance of US dollar-denominated transactions,” Dairibord said.

Operational costs remained under pressure as unreliable electricity supply forced the company to rely on alternative energy sources.

“Utility supply remained unreliable during the period. Ongoing electricity shortages necessitated increased reliance on alternative energy sources… collectively exerting upward pressure on operating expenses,” the Group added.

The company also highlighted global supply disruptions as a major factor affecting production costs.

“In addition, global geopolitical developments continued to disrupt supply chains, driving volatility in fuel, raw material, and packaging input costs,” the statement read.

Dairibord attributed the improved performance to double-digit growth recorded across all major product segments.

“The Group recorded strong volume growth of 26% in Q1 2026, driven by double-digit increases across all core product categories,” the company said.

The commissioning of the Chipinge Steri plant in December 2025 boosted liquid milk production volumes by 15 percent, while capital investments undertaken in late 2025 strengthened performance in beverages and foods.

According to the group, beverages remained the largest contributor to product mix at 67 percent, followed by liquid milks at 24 percent and foods at nine percent.

Revenue for the quarter reached US$39.40 million, representing a 26 percent increase compared to the same period last year.

Despite the strong domestic performance, export volumes declined significantly as the company shifted focus toward servicing increased local demand.

“Export volume declined by 40% year-on-year as the Group prioritised servicing increased domestic demand,” Dairibord said.

Looking ahead, the company warned that geopolitical tensions and global commodity price volatility could sustain cost pressures in the short term.

“Heightened geopolitical tensions… are expected to sustain cost pressures in the near term,” the Group noted, adding that rising petroleum-based packaging costs may affect margins in a price-sensitive market.

However, management remains optimistic about growth prospects supported by improved product availability and operational efficiencies.

“Despite these headwinds, the Group anticipates continued growth momentum into the second quarter, supported by improved product availability following recent capacity enhancements across key brands,” the company said.

Dairibord added that management will continue focusing on strengthening operational efficiencies and enhancing cash generation as it navigates the evolving economic environment.