Cafca revenue tumbles 40pc

HARARE - Zimbabwe Stock Exchange-listed cables manufacturer, Cafca Holdings Limited (Cafca), revenue for the year ended September 2016 slumped 40 percent to $18,1 million from $29,3 million prior comparable period.

Company secretary, Caroline Kangara, attributed the slump to a tough operating environment pointing out that Cafca had also seen reduced working capacity during the period under review.

“The reduction in working capacity resulted in a turnaround in borrowings from a net borrowed position of $680 523 to a net positive bank balance of $1 473 583,” Kangara said in a statement accompanying the period’s financials.

The cables maker scaled down operations in the full year by a third from a 300-tonne per month production to 200 tonnes per month, a development which dropped costs to $500 000 from

$700 000 per month.

Operating profit was also down from $2,4 million to $757 196 with profit before tax also nose diving to $678 028 from $2,4 million.

Following the company’s halt of exports to South Africa, turnover was down to $18,1 million from $29,3 million.

This comes after the company issued a profit warning earlier this year, anticipating depressed profitability on the back of depressed sales.

“Profitability has been adversely affected by the anticipated 30 percent drop in turnover from both a drop in local sales due to lack of liquidity in the market and a drop in export sales due to foreign exchange shortages and devaluation in our primary export markets currencies to the United States dollar (US$),” Cafca said then.

The cables manufacturer also said its basic earnings per share and headline earnings per share for the period was also expected to be approximately $0,06 cents per share which is 75 percent lower than the $2,59 cents per share posted prior period.

The group’s operating profit in the year ended September 30, 2015 slumped 8,3 percent to $2,4 million from $2,7 million while revenue surged to $29,3 million from $23,6 million.

According Kangara, the group’s strategy for the period lapsed was to push volumes and turnover.

The cables manufacturer, which also reported a 41 percent rise in revenue to $14,2 million during half-year to March 31, 2015, is on record saying it could have turned over higher sales had it not placed heavy discounts on its cables to limit cheaper cables imports.

The company did not declare a dividend for the full year, preferring to keep cash reserves in preparation for tough times ahead.

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