Covid-Fallout: Padenga in poor Q1 performance

Padenga management chats before EGM proceedings in Harare on 28 August 2019
Padenga management chats before EGM proceedings in Harare on 28 August 2019
  • Crocodile skin sales slumped 29 percent
  • Recorded no crocodile meat export sales
  • Alligator skin sales fell by 72 percent
  • Mining operation recorded 24 percent decline in gold sales volumes

Harare – Padenga Holdings, which is involved in crocodile and alligator farming and more recently mining, has recorded poor performances across all its business segments in the first quarter ended 31 March 2021 as COVID-19 depressed activity in its key markets.

The company operates three crocodile breeding and production farms in Zimbabwe namely Kariba Crocodile Farm, Ume Crocodile Farm and Nyanya Crocodile Farm on top of a Nile alligator breeding farm at Lone Star Alligator Farm in Texas, USA, and also acquired a 50.1 percent stake in the Dallaglio mining group.

In the Zimbabwe operation, crocodile skin volumes dipped by 29 percent to 5904 compared to 8286 skins in the prior period from a total of 13 006 skins harvested in the quarter.

The crocodile meat export side of the business was the worst hit, failing to achieve even a single export sale as the pandemic maintained its hold on Europe, the company’s number one export market, consequently depressing demand.

“Demand for crocodile meat in Europe remained subdued under the continued impact of the COVID-19 pandemic. No export sales were achieved and 42 tons of export meat was in freezers at the end of the period.”

“Local sales implemented resulted in a volume of 142 tons being sold during Q1 compared to 16 tonnes in FY20,” said Thembinkosi Sibanda, the company board chairman.

Meanwhile, skin sales at the United States operation were even worse, reporting a 72 percent decline in volumes to 3614 from 12 725 sold in the prior period with the majority of the skins sold in the period under review being carryovers from last year.

On the mining front, Dallaglio Mining Group closed the quarter with sales volumes 24 percent lower than in the comparative period of last year with gold sales falling from 183kgs to 138kgs.

This dip however had nothing to do with the depression in the European markets as with the crocodile and alligator operations but rather is attributable to flooding as a result of heavy rainfall which had negative effects on open pit mining activities at the Pickstone Peerless mine.

Consequentially, the Padenga group revenue was 31 percent below the prior period.

The company is however confident that going forth the crocodile business will pick up as a result of luxury fashion brands bouncing back from the 2020 depression in retail sales and a rise in online sales.

On the U.S alligator business, the company says it will have to scale back operations as there has not been any material change in market conditions while prices have remained unviable.

At the same time, they are expecting gold production from Dallaglio to rise by 45 percent of FY2020 levels at the end of this year despite the reported weak start.

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