CFI Holdings says aggregate demand for its retail products during the year ended September 30, 2022, fell following a below-normal 2021/22 agriculture season.
According to a financial statement for the period, the group is therefore expected to continue relying on imports of maize and soya for the next half-year of FY2023.
“The erratic rains received during the 2021/2022 agricultural season suppressed aggregate demand for agro-inputs. Over and above the erratic rains, the country experienced a mid-season drought, resulting in a significant decline in local agricultural output,” CFI chairperson Valerie Pasi said in a statement accompanying the financials.
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Group inflation-adjusted revenues for the year increased by 39,4 percent, from $35,39 billion in the previous year, to $49,37 billion. This was attributed mainly to improved sales volumes from Victoria Foods underpinned by continued recapitalisation.
“The entity’s (Victoria Foods) main business thrust in its first year after its exit from judicial management was ensuring the market is supplied with quality consumer household goods thereby enhancing VF’s brand presence across various product categories the company is traditionally known for.
“Your board is happy to report that VF’s products have been warmly received in the market,” Pasi said.
“The flour mill operated at satisfactory capacity utilisation levels for the year on the back of reasonable wheat availability from the 2021 winter season.”
Maize utilisation however operated below expected capacity utilisation levels given the poor output in the 2021/2022 agricultural season.
CFI reported unrealised exchange losses of $6,1 billion on its foreign currency-denominated loans. As a result, the group posted a loss before tax of $2,59 billion against a loss of $0,75 billion for prior year.
The company incurred a $0,77 billion inflation-adjusted operational loss (inclusive of monetary gains) before depreciation, impairment and financing costs compared to an operational profit of $400 million in prior year.
CFI added that it invested $548,19 million (2021 – $540,6 million) in capital expenditure for the different strategic business units mainly covering IT infrastructure for various Farm & City Centre and Agrifoods, poultry and irrigation infrastructure at Glenara Estates.
“Notwithstanding the challenging economic conditions which prevailed during the period, the group remains optimistic on the overall medium-term trajectory of the economy, as we anticipate continued growth driven largely by the mining, construction, agricultural sectors and increasing diaspora remittances.
“The group will continue to invest in its milling operations to underpin its long-term competitiveness,” Pasi said.
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