Cafca export up 8pc

Listed cables manufacturer, Cafca Limited says its export volumes were 92 tonnes in the third quarter to June 30, 2022 which was 8 percent above the 85 tonnes recorded in the same quarter last year.

According to the group, Rwanda and Mozambique contributed to growth in year-on-year sales.

The group, however, indicated further export gains were offset by a slowdown in the Malawi market
due to limited foreign currency availability.

During the half year to March 31, 2022, the group also highlighted exchange control delays in getting paid by Malawi customers affected export sales

“Our customers in Malawi continue to experience difficulty in obtaining foreign currency so sales there are slightly constrained,” said CAFCA in a trading update for the quarter.

Local volumes for the quarter were 8 percent up on the same quarter last year with the growth mainly in mines and factory cash sales.

Conductor tonnes sold went up 8 percent to 676 compared to 625 tonnes recorded in the comparable period last year.

During the nine months to June 30, 2022, conductor tonnes sold rose 4 percent to 1 879 from 1 800 tonnes recorded during the same prior year period.

According to CAFCA, aluminium conductor sales were down mainly due to the impact of awaiting regulatory approval for the barter deal with the Zimbabwe Electricity Transmission and Distribution Company (ZETDC).

In terms of financial performance, historical year-to-date turnover and profit against the same period last year increased by 197 percent and 251 percent respectively.

Despite the obtaining industrywide challenges, management is upbeat about good performance in the remainder of the financial year with enough stock to meet market demand.

“CAFCA has three months sales cover in finished goods stock giving us the ability to meet the +/- 1400 stock lines the market requires in relation to our weekly production target of 16 line items.

“We believe that the next three months’ volume will be higher than the current quarter’s volume which should result in the Company achieving year-on-year growth in volume sales,” said CAFCA.

While the group is upbeat about its performance going forward, the obtaining business environment characterised by policy shifts is expected to have a material impact on operations and profitability.

Said CAFCA: “Banks have moved interest rates above 200 percent which obviously will materially reduce profits though our interest bill will still be at least four times covered by profit.”-ebusinessweekly