- Local volumes decreased by 6%
- Conductor tonnes sold decreased to 659
- However, exports increased to 106 tonnes
CAFCA, a prominent cable manufacturer listed on the Zimbabwe Stock Exchange (ZSE), has witnessed a significant 16% increase in its export volumes despite a dip in local volumes. During the third quarter that ended on June 30, 2023, CAFCA recorded a substantial growth in export volumes, reaching 106 tonnes. This marks a notable improvement from the previous year's figures, where only 91 tonnes were recorded during the corresponding period in 2022.
Cafca caters to a diverse range of sectors such as power distribution, transmission, telecommunications, mining, industrial applications, and domestic use. The company specializes in the production of various cable types, including low voltage cables, medium voltage cables, high voltage cables, control cables, and overhead conductors. These cables are tailored to meet the specific requirements of each sector, ensuring reliable and efficient solutions for their respective applications.
Despite experiencing a significant increase in export volumes, CAFCA has reported that the Malawian export market has remained subdued. This is primarily attributed to the scarcity of foreign currency, which has posed challenges for conducting business and trade operations in the country.
“Our customers in Malawi continue to experience difficulty in obtaining foreign currency so stock replacement there is slow. Mozambique, Rwanda and Tanzania sales were in line with forecast,” said the company in a trading update.
However, despite the positive trend in export volumes, CAFCA has observed a 6% decline in local volumes for the quarter compared to the same period last year. The Utilities sector experienced the largest drop, and there was a notable decrease in all other sectors towards the end of the quarter.
This decline was attributed to the tight monetary policy implemented by the Zimbabwean government, which has impacted the overall business environment and contributed to the decrease in local demand.
However, in response to the tightly controlled Zimbabwean Dollar (ZWL$) in the market, CAFCA observed a shift in its sales composition. The company has seen an increase in US Dollar (US$) sales, which now account for 85% of turnover. This strategic shift ensured that CAFCA had adequate foreign currency to meet its import needs.
The sales of conductor tonnes saw a decrease from 680 to 659 during the same period compared to the previous year. Furthermore, the year-to-date volumes also showed a decline, slowing down from 1879 during the comparable period in 2022 to 1799.
The outlook for the last quarter of the financial year is mixed for CAFCA. The tight monetary policy continues to have a negative impact on volumes. However, the company anticipates improved volumes due to large project orders in the mining sector, which are expected to contribute positively to the overall performance of the quarter.
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