CFI revenue slumps 45pc

HARARE - Agro-based manufacturing group CFI Holdings Limited (CFI) revenue for the eight months to May 31 slumped 45 percent to $23,1 million down from $41,8 million on the back of a tough operating environment.

CFI acting chief executive officer Timothy Nyika last week told an Annual General Meeting (AGM) that the group, however, anticipated a reduced full year loss on the back of restructuring exercises.

Acting chairperson Grace Muradzikwa also said the group was looking at various cost-cutting mechanisms to enhance cash flows.

Nyika said the group’s financing costs had been reduced to $1,1 million compared to $2,7 million recorded prior comparable period as bank borrowings also declined to $5,8 million from $19,1 million after a Debt Assumption and Compromise Agreement.

In October last year, the group concluded a debt compromise and settlement agreement with local banks who were owed a total of $16 million.

The acting CFI boss said margins were 1,1 percent below prior year due to the impact of reduced capacity utilisations in the Poultry and Milling Divisions as turnover for the poultry division declined 62 percent year on year as a result of the closure of loss-making entities..

He said demand for stock-feeds remained firm during the period, but turnover for Agrifoods was down 66 percent on the back of limited funding. Milling volumes at Victoria Foods however fell 57 percent on the back of limited funding.

On the retail division, turnover went down by 33 percent but Nyika said aggressive cost-containment measures had a positive impact on the operating income of the division.

This comes as the Zimbabwe Stock Exchange (ZSE) recently lifted a suspension it imposed on CFI Holdings (CFI) for failing to comply with listing requirements. This was after the diversified conglomerate had failed to publish its September year-end results within the stipulated time frames resulting in the suspension.

CFI later complied and published its annuals early this month.

In its annual results, CFI said performance in the year to September 2015 had been constrained on the back of inadequate working capital experienced especially in the last half of the financial period under review.

The diversified concern is currently working on a scheme of arrangement aimed at recapitalising the group through the disposal of non-core assets. In a letter addressed to creditors, CFI said it planned to dispose assets valued at over $19 million to settle its legacy debts.

Post a comment

Readers are kindly requested to refrain from using abusive, vulgar, racist, tribalistic, sexist, discriminatory and hurtful language when posting their comments on the Daily News website.
Those who transgress this civilised etiquette will be barred from contributing to our online discussions.
- Editor

Your email address will not be shared.