Key financial highlights in US$ millions

The diversified group Padenga Holdings which is listed on the United States dollar-denominated bourse, Victoria Falls Stock Exchange (VIFEX) succumbed to a loss of US$7 million during the full year ended 31 December 2021 owing to a combination of factors chiefly a loss of US$9 million to the export retention thresholds, interest expenses and a write-down in assets value. 

The combination of the three resulted in the Group suffering a 130% decline in profit after tax despite revenue improving to US$78 million during the full year, which translates to a 10% increase. 

The Group’s export revenue from the crocodile farming succumbed to 40% retention thresholds and by the end of 2021, the disparity between the auction market rate and alternative market rate had widened to a ratio of 2:1. Due to the fast depreciating Zimbabwe dollar, which is also on a free-fall, this means the 40% that the Group received in local currency, was half of their value surrendered in US dollars hence suffering a loss of 20%. 

This led to a US$9 million loss in total revenues during the full year. Commenting on the loss, the Group said, “The consequences of this on the viability of the business is not sustainable.”

Companies which reported losing millions of dollars in revenue due to this surrender tax excluding Padenga include Econet Wireless, Bindura Nickel Corporation and RioZim which lost 55% of revenues in 2021. Despite the surrender tax harming business productivity, the government remains adamant about its removal or either revising it downwards. 

The Group’s loss was also due to a fair valuation write-down of some crocodile skins that are no longer market-tasting due to changing dynamics. A write-down is a reduction in the book value of an asset when its fair market value has fallen and is performed to reduce the value of an asset to offset a loss or expense. The write-down amounted to US$ 3 million dollars from a fair value gain of US$468 113 dollars in 2020. 

The write-down came as some of the skins produced both at Nile Crocodile and Alligator fall short of the expected quality and size by the buyer.

The combined consequences of 40% retention tax and the skins stock value write-down resulting in the Group declaring a during the year,” said the Group in a statement accompanying the financial statement for the year ended 31 December 2021. 

Interest expenses during the period which soared by 52% to US$ 10 million attributed to high borrowings for the rehabilitation of the Eureka gold mine also contributed to the profit losses. Huge borrowings were also a result of a US$20 million investment in Dallaglio during the period. 

The group’s primary focus is now directed towards a reduction in borrowings and thereby eliminating the high interest accruing,” added the Group.

However, the group generated US$15.5 million in cash from operating activities due to increased efficiencies in working capital. 


Mining operations

Gold volumes sold during the year rose by 35% to 976kgs courtesy of the newly commissioned Eureka gold mine which poured its first gold in July 2021 and achieved commercial production volumes by September 2021. 

The mining division contributed mostly to the Group’s total revenue with Dallaglio investments contributing 66%. This followed the one-time commissioning of the Eureka gold mine in October 2021, which also achieved its plant nameplate seven weeks earlier than forecast in November 2021. 

Despite incurring a loss in operations due to high operating costs, Dallaglio also generated positive cash flows of US$10 million from US$6 million in 2020 that contributed to working capital relief.

At Pickstone, performance improved during the second quarter driven by a revised open pit mine plan. 

Skins operations

A total of 55 341 skins were sold during the year, down 23% from 72 244 sold in 2020 with the Zimbabwean operation selling 39 936 skins, down from 43 254 sold in 2020.  

The decrease in crocodile skins sold was because some of the harvested skins fell out of the quality size specified by PHL’s premium brand customer. 

Nile crocodile operations recorded 26 871 skins in inventory at the end of the period. However, 18 168 fell short of demand in premium markets as they largely fell outside the desired size and quality dynamics while Alligator operations sold 15 405 skins down from 28 990 sold in 2020 due to change.


The operation closed the period with 168 585 crocodile growers up from 148 042 in 2020. 

The Texas alligator operation contributed 28% of the volume of the skin down from 40% in 2020 as the bulk produced were lower grade skins. 

The Zimbabwean skins operation contributed US$5 million in cash from operating activities.


Going forward, the Group expects to cut borrowing costs due to US$20 million in investments in Dallaglio. Gold volumes for the Dallaglio group are therefore expected to increase by 25% with a 10% reduction in costs per ounce produced. 

However, the Alligator skins marketer is expected to remain depressed given high volumes of unsold stock skins of the species and the Group anticipates the situation to persist for a maximum of five years. 

The group will return to profitability in 2022,” added the Group.