- Gold sales volumes breached 1000 kgs mark in six months
- Croc skins harvested surged by 90%
- However, PAT halved
Harare- Padenga Holdings Limited, a diversified company listed on the Zimbabwe Stock Exchange, reported an increase in its gold and crocodile volumes output during the six months that ended on June 30, 2023. The company, which has investments in both gold and crocodile farming, experienced growth in both sectors, leading to a net profit for the year. However, the net profit was lower compared to the previous year due to high operational costs.
During the period, Padenga’s flagship operations at Dalaglio, where mining activities at Eureka and Pickstone Peerless occurred, experienced a significant increase in gold volumes sold. The company recorded a 16% growth in gold volumes, surpassing the milestone of 1000 kg of gold output. This marked the first time the company achieved sales volumes exceeding 1000 kg within a six-month period since the mining operations began in 2019.
Before diversifying into the mining industry, Padenga relied primarily on its crocodile farming business as the main source of revenue. The introduction of gold mining was initially intended to complement the contributions from the farming side. However, since 2020, following the acquisition of a 50.1% stake in 2019, the gold mining operations at Dalaglio where the Eureka Mine is the prominent asset, have gradually become the primary revenue generator. At present, the mining business accounts for more than 80% of Padenga Holdings' earnings. This shift in revenue composition highlights the increasing significance and profitability of the company's mining operations.
On the agricultural side, Padenga Nile crocodile operations experienced a significant 90% increase in skin harvest volumes. The number of skins harvested rose from 11,217 to 21,280, with the benefit of carrying over 10,000 premium skins from 2022. This increase indicates that the strategies implemented to enhance skin quality over the past two years are beginning to yield positive results.
As a direct consequence, the company witnessed a notable surge in skin sales volumes, which rose by 52% from 12,321 to 18,709.
“We have extended the production season to the end of February annually to encorperate the full summer period and this will contribute towards finishing skins to the increased quality standards demanded by the market,” said Thembinkosi Nkosana Sibanda, the Company’s chairperson.
In terms of revenue, it increased by 21% generating US$62.6 million compared to the previous period's revenue of US$51.7 million. The company successfully reduced net interest expenses by 27% through the restructuring of borrowings during the period, leading to improved financial efficiency. There was a significant improvement in cash generated from operations, with an increase from US$93,000 to US$10 million.
Meanwhile, the crocodile division witnessed a 128% increase in revenue, resulting in a total of US$2.4 million generated in cash from operations, compared to the previous period's revenue of US$2.2 million.
However, the unit incurred exchange losses amounting to US$988,000, which contrasted with the previous period's exchange gains of US$1 million. These exchange losses indicate a negative impact on the division's financial position due to fluctuations in currency exchange rates.
Cumulatively, Group revenue of US$74 million, representing a notable 31% increase compared to the revenue of US$56 million in the comparative period was achieved. The Dallaglio operations made a significant contribution of 84% to the overall revenue, while the Nile operations accounted for 16%, which is an increase from the previous period's 9% contribution. However, Dallaglio operations' contribution of 84% was slightly lower than the 91% contribution in the comparative period.
Despite the growth in revenue, the company's after-tax profit experienced a significant decline, halving from US$11 million to US$5 million. This decline was due to an increase in operating costs, which impacted the overall profitability of the company.
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