Gvt support, forex availability key to Cafca H1 profit

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ZIMBABWE Stock Exchange-listed cables maker CAFCA said sustainability of its September 30, 2018 profit will be based on government supporting local manufacturers and availability of foreign currency for raw material imports.
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.
The performance was driven by volumes growth in the local market on the back of protection of local manufacturers by government.
Rob Webster, the company’s chief executive, told The Financial Gazette on Monday that the key strategy for the year was growth in sales volume taking advantage of the ban on cheap imports.
“Sustainability of our results will be based on three factors ― government continuing to support local manufacturers, availability of foreign currency for raw materials and consumers having disposable incomes to buy our product,” said Webster.
He said the company had “a good December” which they were also hoping would be maintained this month.
“We have targets for raw material holding and finished goods stock holding which we have maintained so we do not have a problem with stockouts in the short term,” he said.
The company’s profitability has been improved by strong local demand and a change in sales mix from aluminum to copper products. The high level of finished goods brought forward from the previous year also contributed and allowed the company to hold prices throughout the year.
“We have benefited significantly from cheap imports not coming into Zimbabwe. We are supplying the local market 100 percent and still building up finished goods stock for any spike in demand,” said Webster.
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.
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