eBusiness Weekly
Enacy Mapakame
Despite the challenging operating environment in Zimbabwe, cables manufacturer — Cafca — recorded a surge in profitability for the half year to March 31, 2020 compared to the same period in the prior year.
According to the firm, this was driven mainly by the benefit of carrying large stocks of unfinished goods and no foreign liabilities, plus the gain on export debtors and foreign bank and cash balances.
During the period under review, profit before tax surged by over 2 274 percent to $83,1 million in historical terms from $3,5 million recorded in the same period in the prior year.
Profit for the period came in at $54,4 million, representing a 2000 percent growth on prior year comparable period’s $2,5 million.
Basic earnings per share grew 2 000 percent to 163 cents compared to 7 cents achieved during the same period in 2019.
Volumes remained almost flat at 836 tonnes but the firm managed to grow exports to 14 percent of sales from 11 percent.
Indications are that the company has stock cover of six months deliveries of finished goods, which is 746 tonnes and this is expected to mitigate any supply chain disruptions caused by Covid-19.
During the half year under review, total revenue rose by 1 000 percent to $206,9 million compared to the $18,9 million achieved during the same period last year.
Cafca’s revenue is primarily from customers who are domiciled in Zimbabwe and others from external customers mainly in Zambia, Malawi and Mozambique.
According to the group, revenue from customers domiciled in Zimbabwe stood at $185 million from $17 million in the comparable period.
Revenue from external customers surged by 2 500 percent to $21 million compared to $800 000 recorded in the comparable prior year period.
By close of the period, total assets stood at $180 million compared to $71,5 million recorded during the same period last year.
Despite the challenging operating environment, now worsened by Covid-19 pandemic and is effects on supply chains as well as both the domestic and export market, management remains upbeat of pursuing monthly sales of 140 tonnes.
“We have commitments from our raw materials suppliers that immediate needs will be meet with only or imported spare parts requirements being a minor challenge.
“Despite the expected local market liquidity constraints, indications from our local customers are that local sales will be met,” said the group in a statement accompanying the financials.
Cafca waived payment of an interim dividend.
