Harare – Cable manufacturer, CAFCA’s operating profit for the year ended September 30, 2018 improved four fold from the previous year of $1.2 million to $5.2 million.
The Company said an increase in volume together with a change in sales mix from aluminium to copper resulted in turnover increasing 57 percent year on year.
It said most of the growth was in the local market resulting mainly from protection by government of local manufactures.
“Profitability has been improved by strong local demand and a change in sales mix from aluminium to copper products. The high level of finished goods brought forward from the previous year has also contributed and allowed us to hold prices throughout the year.”
“The prior year was adversely affected by a volume decrease that resulted in breakeven months until the cost base was significantly reduced — this cost base has since been maintained.”
Stocks at the beginning of the year were $8.2 million and closed at $8.6 million as a hedge against hyperinflation and short term availability of foreign exchange.
Cash balances as at the year-end were $8.9 million of which $3.5 million was set aside for the dividend and $4.0 million retained for capital expenditure.
Going forward CAFCA said the economy since the year end has taken a significant down turn as a result of the acute foreign exchange shortage and the market has discounted the Real Time Gross Transfer Settlement (“RTGS”) bank balances vis-a-vis the value of US dollars.
Until such time as the authorities can put in place a more equitable and stable system of foreign currency allocation it will be difficult to predict the fortunes of either the economy or the company.
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