Cafca projects strong volumes growth in 2022
LISTED cables manufacturer Cafca Limited expects a strong volume performance for the remainder of the current financial year to be driven by anticipated improved economic activity.
The firm is, however, concerned about the exchange rate volatility, which it says is posing challenges on several businesses across sectors. As of the end of the week, the US dollar was trading at $275/US$1 on the interbank market, $380 and $400/US$1 on the illegal parallel market and $173/US$1 on the auction.
“Exchange rate volatility is a cause for concern, but the upside of which is increased economic activity as consumers invest to hedge their savings.
“We are therefore forecasting an increase in volume in the second half of the year over the first half,” said Cafca in an update for the half year to March 31, 2022.
During the half year period, volumes increased by a marginal 2 percent to 1 199 tonnes over the prior year comparable period, which recorded 1 175 tonnes.
According to the group, volumes performance was adversely affected by delays in getting regulatory approval to extend their barter deal with the Zimbabwe Electricity Transmission and Distribution Company coupled with exchange control delays in getting paid by Malawi customers which further affected export sales.
“We are confident that we will pick up the volume shortfall against budget in the second six months of the year,” said Cafca.
In terms of financial performance, revenue for the half year under review jumped 44 percent to $3,339 billion from $2,316 billion recorded in the same period last year.
Operating profit came in 61 percent above the same period in prior year to settle at $972
million.
Pretax profit reflected a 169 percent increase to $710 million from $263 million in the same period last year.
Profit for the period more than tripled to $512 million from prior year comparable period’s $115 million.
During the period, borrowings increased by 242 percent to $445 million from $130 million to finance inventories which moved from $930 million to $1,789 billion.
Total assets increased 33 percent to $4 billion.
The group did not declare an interim dividend but will be considering a final dividend to shareholders at the year end.-The Herald
