Padenga bullish about meeting targets

Padenga Holdings, a crocodile skins producer, is confident it will be able to meet its skins harvest and quality targets for the export markets from the firm’s Zimbabwe operations.

This comes after the group successfully trialled amended operational procedures that have significantly improved quality of young stock achieved in the prior years.

Group chairman Thembinkosi Sibanda said these trials should be replicated across the board during the current financial year.

“This is consistent with premium market expectations of continued improvement in skin quality in pursuit of totally blemish free skins.

“These trial initiatives will be applied across the board in 2022,” he said in an operations update for the third quarter to September 30, 2021.

While the alligator skin market has remained depressed, Mr Sibanda said positive skin quality improvements were achieved in the harvest offtakes undertaken at the end of the third quarter.

Padenga, however, made a strategic decision to scale back operations at the alligator business until the trading environment improved.

Due to the Covid-19 pandemic, the firm has not made any meat exports although the business had anticipated to resume crocodile meat exports to Europe by end of the last quarter of financial year 2021.

During the third quarter period, the Nile crocodile operation in Zimbabwe recorded a 45 percent increase in skin sales volumes compared to the prior period.

Padenga said three sales gradings were done in March and September last year, which achieved first grade ratio consistent with budget.

At Tallow Creek Ranch — a United States based operation, skins volume went down 27 percent compared to same period in the prior year.
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There were a significant number of carry-overs skins from prior year that were sold during FY2021.

Market watchers however, see significant recovery in the diversified firm with full year revenue projected to go on an upward trajectory in financial year 2021 and beyond.

Performance is expected to be backed by mining operations as well as the higher foreign currency retention from the company’s Victoria Falls Exchange (VFEX) listing.

Following an export incentive introduced by Government in May last year, Padenga’s board made a decision to delist from the Zimbabwe Stock Exchange (ZSE) and list on VFEX, becoming the second listing on the US dollar denominated bourse on July 9, 2021.

Previously a crocodile skins and meat producer, Padenga recently diversified into gold mining following the acquisition of a 50,01 percent shareholding in Dallaglio Investments (Private) Limited.

Its gold operation, Eureka Mine, and export incentives are expected to boost the group’s revenue performance for the fully year and in future.

In the nine months to September 30, 2021, Dallaglio’s gold sales volumes fell 8 percent to 501 kilogrammes mainly due to a weak first quarter performance at Pickstone Peerless mine due to excessive rainfall.

But the newly refurbished Eureka Mine started producing gold at the end of July and sales commenced in September last year.

The mine contributed 92 percent of gold output and was expected to ramp up to over 100 kilograms of gold per month by year end.-The Herald