Padenga remains in the red

HARARE - Crocodile skin producer Padenga Holdings Limited (Padenga) remains in the red, posting a $1,2 million loss after tax in the half year to December 2012 from $2,8 million incurred in previous comparable period.

The group said the depressed performance is in line with expectations given the business is seasonal.

Alexander Calder, Padenga’s chairperson, however, said the group’s local operations were poised to improve when culling and sales begin in the fourth quarter.

“We are confident that the local operation will cull and sell 43 000 skins in the culling season starting this month. We remain focused on stringent cost control and are confident of meeting our annual profit forecast,” said Calder.

Padenga has crocodile farms in Zimbabwe and the United States.

Calder said although consolidated revenue stood at $3,9 million during the period under review, the group posted a $1,5 million operating loss and a loss before tax of $1,7 million.

“These results are within our expectations,” said Calder.

“A quality bonus of $2,1 million was received from our customers against skins delivered. The local operations recorded an operating loss $2,6 million and a loss before tax of $2,7 million.

“These results are better than budgeted as our expenses were three percent lower than forecast,” said Calder adding that they still expected the operation to meet full year projected profit.

Earnings per share decreased to $0,32 from $0,53.

This comes as the group’s America-based subsidiary Lone Star Alligator Farms (LSAF) exceeded expectations by recorded a turnover of $1,7 million and a profit before tax of $1 million from the sale of 7882 alligator skins as the operation’s full year culling and skin sales occurred in the period to December.

Padenga holds a 50 percent stake in LSAF.

“The annual hatchling procurement programme conducted in August and September 2012 yielded 9623 animals inducted into the pens. These animals will be culled in October this year,” said Calder.

Padenga also doubled the capacity of operations by constructing pens that can hold 20 000 animals from the current 10 000, in anticipation of volume growth in the period to next year.

“Significant volumes growth is anticipated in LSAF as a consequence of a strategy in place to acquire additional hatchlings during the 2013 season for realisation in 2014,”added Calder.

Although interest rates remained high, the company managed to access borrowings at a cost of seven percent per annum for the local operation, giving a stable operating environment during the six months under review.

Padenga says volumes are expected to grow as a result of trying to meet the high demand for luxury products which use crocodilian skins as raw materials.

The quality skins produced by Padenga has resulted in most top brand houses posting increased sales and profits in the year to December 2012. - Kudzai Chawafambira

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