CAFCA posts $3,5m profit after tax

ZIMBABWE Stock Exchange-listed cables maker, CAFCA, recorded a $3,5 million profit after tax in the year to September 30 2018, up from $726 213 posted in prior comparable period.
Caroline Kangara, the group’s company secretary, said the performance was driven by volumes growth in the local market on the back of protection local manufacturers by government.
“Profitability has been improved by strong local demand and a change in sales mix from aluminum to copper products,” she said.
“The high level of finished goods brought forward from the previous year has also contributed and allowed us to hold prices throughout the year,” Kangara added.
“The prior year was adversely affected by a volume decrease that resulted in breakeven months until the cost base was significantly reduced. This cost base has since been maintained,” she said.
During the period under review, operating profit jumped four-fold to $5,2 million, from $1,2 million during the period under review.
As at September 30 2018, cash balances stood at $8,9 million, of which $3,5 million was set aside for dividend payment, while $4 million was retained for capital expenditure.
There were no foreign liabilities.
The company’s directors approved a dividend of 10,5 cents per share to shareholders which was paid on October 5.
At the beginning of the financial year, the company’s stock was valued at $8,2 million and closed at $8,6 million.
Kangara said the economy had taken a significant knock since the end of their reporting period as a result of the acute foreign exchange shortages and the discounted the real time gross transfer settlement bank balances vis-à-vis the US dollars.
“Until such time as the authorities can put in place a more equitable and stable system of foreign currency allocation, it will be difficult to predict the fortunes of either the economy or the company,” she said.
Recently, the company said it had put its recapitalisation plans on hold due to the country’s worsening foreign currency shortages.
Its managing director, Rob Webster, told The Financial Gazette that they require at least $4 million in hard currency annually to recapitalise operations.
“We have budgeted on spending $4 million per annum on recapitalizing, though, without forex, this will not happen. There is no point in using precious foreign currency on machines if there are no raw materials to put through them,” he said.
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