• CFI Holdings has recorded revenue growth of 9.9% in inflation-adjusted terms. 
• Sales volumes rose by 9% compared to the past year. 
• Glenara potato harvest decreased by 5% compared to the same period in the preceding year, while the Estate increased the area planted with commercial maize and soya bean by 11% and 19% respectively. 

Harare - CFI Holdings is a business conglomerate that has navigated challenging macroeconomic conditions to deliver impressive results for Q1 ending 31 Dec 2022. The group operates in three divisions - Poultry, Retail, and Specialized - and has shown resilience and agility in the face of adversity.

One of the key drivers of CFI Holdings' success has been its diversified portfolio. The group's Poultry division includes Agrifoods, Agrimix, Hubbard Zimbabwe, Crest Breeders, and Veto & Suncrest. The Retail division includes Farm & City, Town & Country, and Honey farm. The Specialized division includes Victoria Foods and Kobenhavn Logistics. This diversified approach has allowed the group to weather the storm of economic uncertainty and come out on top.

Despite the challenging operating environment, CFI Holdings has recorded revenue growth of 9.9% in inflation-adjusted terms. This is an impressive feat, given the local erratic macroeconomic division and disrupted global supply chain due to the Russia-Ukraine war. The use of foreign currency has helped the group overcome liquidity constraints on the local currency, and reduced performance has been attributed to the pass-through effects of the war in Ukraine affecting global supply chains and the prices of key commodities.

The Retail division has been a key revenue driver for CFI Holdings, with sales volumes rising by 9% compared to the past year. However, fertilizer sales have been dealt a blow due to the high cost of the commodity caused by the conflict in Ukraine influencing worldwide supply lines and the low producer prices for both tobacco and maize in the present season. The price of fertilizer, which is among farmers' greatest expenses, reached all-time highs in the spring of 2022 after Russia, the world's top fertilizer exporter, invaded Ukraine in February. According to Bloomberg's Green Markets Weekly North America Fertilizer Price Index, it reached an all-time high of 1,270.4 on March 25, surging past the former record of 932.3 set in 2008.

It's worth noting that the Glenara potato harvest decreased by 5% compared to the same period in the preceding year, due to a shortage of seed supply for planting. On the other hand, the Estate increased the area planted with commercial maize and soya bean by 11% and 19% respectively, compared to the prior year. This shows that CFI Holdings is taking steps to balance out raw material supplies for Victoria Foods and Agrifoods.

CFI Holdings' ability to navigate through challenging macroeconomic conditions can be traced back to its recent history. The group has a long-standing reputation for excellence, having been founded in 1908. In the 1980s, CFI Holdings was one of the largest companies in Zimbabwe, with a diversified portfolio that included agriculture, retail, and manufacturing. However, the group faced a number of challenges in the 1990s, including a downturn in the economy and increased competition.

In response to these challenges, CFI Holdings restructured its operations and focused on its core strengths. This included divesting from non-core businesses and consolidating its operations in key sectors such as agriculture and retail. The group also invested heavily in technology and innovation to improve its efficiency and competitiveness. These efforts have paid off in recent years, as the group has been able to weather the storm of economic uncertainty and come out on top.

Looking ahead, CFI Holdings is optimistic about the future. The group is anticipating a good agricultural season, which should boost consumer spending on basic food stuffs, farming, construction, and mining activities. However, the local macroeconomic environment remains tightened, and the group will need to continue monitoring its operating costs in light of hardening costs and periods of stagnated growth.

As we look ahead to the rest of 2023, CFI Holdings seems poised to continue its upward trajectory. The easing of fertilizer prices and the expected good agricultural season bodes well for the group's performance in the coming months. However, it is worth noting that the local macroeconomic environment remains tight, with the government still focused on taming inflation and recovering the local currency value against the greenback. This could present challenges for CFI Holdings, but with its diversified portfolio and strong track record of navigating difficult operating environments, the group is well-positioned to weather any storms that may come its way.

In conclusion, CFI Holdings' Q1 2023 trading update shows that the group's diversification strategy is paying off, with overall revenue growth of 9.9% in inflation-adjusted terms. Despite the challenging operating environment, the group's performance remained elevated, driven by solid performances from its retail and specialized divisions, and the continued demand for stock feeds. The group's Poultry division faced headwinds due to high fertilizer prices, but this is expected to ease in the coming months. Looking ahead, CFI Holdings is well positioned to continue its upward trajectory, with a strong track record of navigating difficult operating environments and a diversified portfolio that is poised to take advantage of any opportunities that arise.

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