Return of key subsidiary boosts CFI’s FY20 earnings

  • Group revenue increased by over 30%
  • Benefitted from the reconsolidation of CPG’s revenue following exit from judicial management
  • Volatile economy, COVID 19 and drought however remained strenuous to greater group operations

Leading agricultural-based industrial holding company CFI holdings limited has posted a 30% growth in revenue in the relatively tough financial year ended 30 September 2020 owing to the consolidation of the revenue of its subsidiary Crest Poultry Group (CPG) for the first time since 2016 when it was placed under judicial management.

Group inflation adjusted revenue for the fore mentioned period was ZW$3.4 billion up by ZW$0.8 billion from the revenue earnings posted in the prior year while group operating profit inclusive of monetary gain increased by 10.8% to ZWL701.7 million, up from ZWL633.1 million earned in the prior period of which ZW$220 million is accredited to CPG and Victoria foods which had been under judicial management.

“The improvement is attributable to cost containment efforts sustained during the period, increased procurement efficiencies and the positive contribution from CPG’s performance,” the company board chairperson, Itai Pasi said.

Since September 2016, CPG and Victoria foods were under provisional judicial management to allow for debt restructuring, re-organisation and recapitalisation of the entities following Various creditors had obtained orders and writs of execution against the company assets.

CPG since exited judicial management in January 2020 following the payment full amounts owed to scheme creditors.

In the same period however, the Group’s other operations were negatively affected by the volatile economic situation, COVID-19 and the drought that ran for two straight seasons from 2018 to 2020.

“The trading environment was marked by operational and economic challenges. In particular, hyperinflation, an unstable exchange rate and limited availability of foreign currency in the formal banking channels for the greater part of the year. This was exacerbated by drought induced shortages of cereals used in the stock feeds manufacturing processes and in the last half of the year, the COVID-19 pandemic,” the chairperson stated.

“The inflationary environment and drought generally impacted negatively on consumer disposable incomes thereby reducing discretionary household spending,” Ms Pasi added.

The poor outturn of maize and soya that the company needs for the manufacturing of stockfeed due to reduced planting because of poor weather forced the company to venture into the import market of these cereals and it expects to be importing them until June 2021.

This need for importation cereals was cross cutting with Zimbabwe as a whole spending US$297.8 million on the importation of maize in the year 2020 which was more than 11 times the amount of US$26.7 million spent in 2019.

Going forward the group is targeting and pursuing the removal of Victoria Foods from judicial management and the good amounts of rain rainfall that have been received to date throughout the country are expected to be a huge boost to operations.

CFI operates four main segments into manufacturing and selling fresh produce and manufacturing stock feed, as well as property management and letting and is the parent to the brands and companies Farm and City Centre, Vetco Animal Health, Suncrest, Victoria Foods and Saturday Retreat Estate among other

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