Padenga upbeat to meet targets

Victoria Falls Stock Exchange (VFEX) listed firm, Padenga Holdings Limited, is upbeat of meeting its volumes target for both gold and skins by year end as they maintain the growth trajectory from the first half of the year.

Its gold operation –Eureka Mine – became fully operational this year, which is expected to continue adding to the group’s gold output.

This year, Government implemented measures to narrow the gap between the official exchange rate and the parallel market rate, which is a positive move for businesses, especially exporters.

“This trend towards exchange rate convergence will yield positive results for exporters as it will reduce the value loss on the mandatory liquidation on export receipts,” said chairman Thembinkosi Sibanda.

“We remain confident in our strong fundamentals and we will continue to focus on preserving value while managing the risks triggered by the volatile external environment.

“The group has returned to profitability during H1 22 and management is confident that volume targets for gold and skins will be met,” he said.

According to the group, the Nile crocodile business is expected to continue supplying the market with premium quality skins per contract volumes.

Sibanda said demand for these skins – top quality defect-free skins – is steady and the price is expected to remain firm.

Early harvesting has commenced and currently, initiatives for eliminating scarring during life of crocodile are now in place and an enhanced quality of harvested skins is seen in pens. The group is also identifying markets for all low-grade skins following an oversupply of these grades and contraction in the second and third tier markets.

In terms of gold, the yellow metal has seen the group return to profitability during the half year to June 30, 2022. Experts have opined diversifying into mining operations was a step in the right direction at a time markets for skins were becoming volatile due to many factors.

According to the group, the return to profitability was a result of incremental gold volumes -641,4kg – from Eureka Mine which was not yet productive during the same period in 2021 as well as favourable gold prices and the non-repeat of the significant fair value write down on skins experienced in the prior year.

At 933kg, volumes were 245 percent above the comparable period and only 4 percent lower than volumes for the full year in 2021. This was attributable to Eureka Mine, which had not yet been fully operational during the same period last year as well as improved gold prices.-ebusinessweekly