Late rains hit CFI volumes

CFI Holdings says the late onset of rains in the 2021-22 season hit volumes at its flagship retail division for the third quarter to June 30, 2022.

The firm said the period was marked by subdued demand for fertilisers.

“Sales volumes for the retail division’s key revenue drivers during the quarter were behind the same period last year,” the firm said in a trading update.

“The late onset of the 2021/22 rain season and the resultant lower harvest suppressed demand for agricultural inputs. Demand for fertilisers, which traditionally peak during the tobacco marketing season, was also constrained by the significant real price increases for the commodity. Cement sales for the quarter were also adversely affected by supply constraints.”

It said flour sales at Victoria Foods, one of its key units, rose by 135% over the same period last year, inspired by the company’s recapitalisation at the beginning of the year and improved raw material availability during the period.

CFI’s other unit, Glenara, harvested 1 770 tonnes of maize as well as 729 tonnes of potatoes and 621 tonnes of soyabeans during the period, the report noted.

It said these figures were consistent with yields achieved during the prior year comparable period.

CFI’s inflation-adjusted revenues increased by 21,8% to $6,54 billion during the review period, compared to $5,34 billion during the prior year quarter. It said the retail division contributed 70,85% to group inflation adjusted turnover.

This was a slowdown compared to 87,37% during the same period in 2021.

The report said the milling and farming operations accounted for 25,79% and 3,36% of group turnover, respectively. “Local and global inflation headwinds and steep exchange rate disparities in the local market are expected to characterise the trading environment in the short term. This is expected to depress disposable income and spending to year-end, save for mining and construction sectors of the economy, where improvements are expected. Notwithstanding the challenges, the group remains optimistic of consolidating its fortunes amid the evolving challenges in the operating environment. The group will maintain its focus on sustaining business continuity in the obtaining environment,” said CFI.

“The group hopes for collaborative dialogue among government, industry and other stakeholders,” the report noted.-newsday