Evolving market conditions weigh on Padenga’s performance in 2019

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  • Revenue declined by 22% in 2019
  • Profit before tax down by 39%
  • Turnover was 25% down under the crocodile operation
  • Profit in the crocodile operation plunged by 18%

Harare – Padenga Holdings Limited registered a 22% contraction in overall revenue for the year ended 31 December 2019.

In a results publication, Padenga said revenue for the period stood at US$29.1 million from US$37.3 million recorded in the prior year.

The company attributes the performance to evolving market conditions that had an impact on skin prices and increased costs inherent in meeting social license expectations and the implementation of measures to address enhanced skin quality expectations.

Profit before tax stood at US$7 million, a -39% decline from US$11.4 million recorded in 2018.

Under the crocodile operation, the company registered a negative performance during the period under review.

Turnover plunged by 25% from US$34 million to US$25.5 million while volumes were down by 6%. Operating profit declined by 18% to US$10.1 million.

The company sold 41 450 skins in 2019 compared to 44 253 sold in the previous year. Padenga closed the year with 7 729 skins in stock that will be sold in 2020.

Padenga said the quality of grade of 81% Grade 1 skins achieved was below the 89% that was achieved in 2018 and monthly harvest totals were low at the beginning of the year as the harvestable crop was retained to meet increased quality demands.

However, the Group harvested 47 752 animals in the crocodile operation which was 4% above budget.

The chairman MR T Sibanda said, “This number included skins +40cm sizes that due to changing market dynamics were surplus to the customer’s requirements and consequently have created the opportunity for the sale of Padenga skins into alternative markets.”

He also added that the average size of skins delivered to their principal customer was at 34.4cms, consistent with their size request for the production year.

The Group closed the year with a total of 156 911 grower crocodiles on the ground compared to 162 672 at the end of 2018.

“This number of crocodiles was consistent with our strategy to achieve a sustained annual production of 46 000 skins.” Said Sibanda.

In the period under review, Padenga resurfaced a total of 495 pens as part of management initiatives to constantly enhance skin quality, increase growth rates, achieve animal welfare compliance and improve efficiencies.

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