CAFCA’s profit tumbles despite increase in sales volumes

  • PAT down 80% to 66.7 million
  • Sales volumes up 41%
  • Export volumes surge by 52%

Harare – CAFCA’s after tax profit fell by 80% to ZWL66.7 million during the half-year ended March 2021 despite registering in both domestic and export sales volume.

The ZSE-listed electrical and telecommunication cable manufacturing firm had recorded a net profit of ZWL334.8 million in the same comparable period last year.

The Company said that the net profit decreased due to the fact that a significant amount of stock manufactured in the prior years was sold in the current period which reduces the amount of uplift in monetary gains or loss calculation.

Sales volumes for the period increased by 41% to 1175 tonnes while export volumes also a registered an increase over the prior year comparative period by 52%.

“Sales are buoyant in the following sectors – mines, retail, construction and industry,” the Company said.

Revenue for the period increased by 23% to ZWL$1.3 billion from ZWL$1 billion recorded in the same period last year in line with the surge in sales volume.

CAFCA manufactures over 900 cabling products primarily for the Zimbabwean, Southern and
Central African markets but also has an export footprint that extends into parts of Europe.

Meanwhile, borrowings increased by 52% from $89.6 million to $136.1 million to finance working capital. Historical cost stock in monetary terms went up from $345.1 million to $580 million despite the fact that stock volumes went down from 865 tonnes to 727 tonnes.

On the outlook, the Company said that they do not expect the next quarter to be materially different to the current quarter.

“Local sales in the buoyant sectors should continue and export sales may be marginally affected by the volatile London Market Exchange copper prices,” said the Company.

“Borrowings will continue to increase to fund working capital firstly because the price of copper has gone up and secondly the inflation impact of replacing old stock with current replacement cost.”

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