Harare – Crocodile skins and meat producer, Padenga Holdings managed to shelve high inflation related costs to record a 40 percent increase in revenue for the year ended 31 December 2018 to US$42.5 million from US$30.3 million achieved in the prior 2017 period.
In a statement accompanying the financial results, Group Chairman Thembinkosi Sibanda said this performance was achieved on the back of tightening skin market and an increased demand for quality with a consequent impact on skin prices achieved in the period.
Profit before tax for the period under review amounted to US$17.8 million compared to US$16.4 million in 2017, representing an increase of 9 percent.
“We sold 44 253 skins in FY18, up from 43 313 sold in the previous period. We closed the year with an additional 1 679 skins in stock which were graded and sold subsequent to year-end,” said Sibanda.
Volumes from alligator operations were up 21 percent to 13 500 skins against 11 190 skins sold in the prior period. Resultantly, the operation recorded turnover of US$3.3 million, which is an increase of 85 percent from US$1.8 million recorded in 2017.
Sibanda said 44 184 crocodiles were harvested during the period which was below budget by 6 percent, but in line with prior period while the alligator operation had a total of 43 770 alligators in pens at the end of the period under review.
The group encountered challenges related to legacy disease issues that arose as a consequence of poor water quality resultant from low Lake water levels in late 2016 and early 2017. This negatively impacted on skin quality and prompted the group to hold back animals in pens for longer period to maximise skin quality.
“We invested significant financial and human capital into revising and strengthening operational processes, systems and oversight in an effort to resolve the quality challenges,” said Sibanda.
Going forward, Sibanda said that the Group is optimistic about further growth prospects within both its business units.
“The Zimbabwean operation is projecting to sell 46 000 premium quality skins in 2019. The concerted initiatives to address the historical micro-defect issues impacting negatively on skin quality are showing positive results at farm level and are expected to flow through to finished skin grade.”
Additionally, Sibanda said demand for defect free skins remains steady and prices are anticipated to hold as long as the quality expectations of the premium market are satisfied.
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Raynold Mhotseka is a Journalism and Media Studies student at the University of Zimbabwe. He serves as a news writer at financial research firm, Equity Axis where he is currently on attachment. He can be contacted through the following email links, email@example.com and firstname.lastname@example.org.