Padenga back in the red

HARARE - Crocodile skin products producer Padenga Holdings Limited (Padenga) incurred a $2,4 million loss in the half year to June 2014 compared to a $2,1 million profit realised in prior comparable.

The Zimbabwe Stock Exchange-listed group’s chairman, Ken Calder, said the depressed performance was on the back of changes in the culling season.

He said the change in year-end implemented over an 18-month period to December 2013 enabled flexibility to cull the crocodiles and maximise quality and achieve targeted sizes.

“Consequently, we delayed the onset of culling operations and took fewer animals in the months of May and June relative to prior year,” he said, adding that the change is reflected in the improved grade average achieved on the skins sold to date.

“We therefore sold only 7 467 skins compared to 15 026 in the same period last year. The decrease in volumes is simply a timing difference and we will achieve our annual targeted cull numbers by December 2014,” said Calder.

Crocodile skin is a major component in the manufacture of branded luxury goods and apparel such as handbags, belts and jackets.

Crocodile blood is used as a food supplement to promote health due to its haemoglobin levels. Crocodile oil is used as a cure for skin problems and other ailments.

The Zimbabwe Stock Exchange-listed counter reminded stakeholders that operationally the first half of the year is traditionally a cost accumulation period with the majority of culling and sales always coming in the second half of the year.

“In line with the explanation above, the group recorded revenue of $4 763 133 in the six months to June 2014 compared to $8 840 607 for the comparable period in 2013,” said Calder adding that the group recorded an operating loss of $2 455 556 compared to an operating profit of $2 164 917 realised in the six months to June 2013.

Profit before tax for the six months under review amounted to $2 278 908 against $9 797 292 for prior year, while basic earnings per share decline from 1,23 cents in 2013 to 0,33 cents.

Calder noted that the decline in revenue and profitability was a function of the reduced number of skins sold. Padenga has at least four crocodile farms in Zimbabwe and most of these rely on wild egg collections, while it is boosting its US alligator-rearing business in Texas.

In the Nile crocodile operation the quality of the skins harvested so far this year has been exceptional. We expect this to hold for the remainder of the season and that we will produce a good result in terms of skin size and quality at year-end,” said Calder.

He added that company will continue to make strides in growing its Breeder herd with the intention of becoming self-sufficient in egg production within the next couple of years.

“The market for premium quality skins remained stable in the period under review and we have contracted to sell the volume of skins we expect to produce. We should therefore attain our financial targets for the full year 2014,” he said.

No dividend was declared in the interim period.

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