Retail operations prop up CFI
Agro industrial firm, CFI Holdings Limited’s revenue for the half year to March 31, 2021 jumped 79,8 percent to $3,56 billion from $1,98 billion recorded during the same period last year on increased demand for farming inputs during the period.
The country received good rainfalls, which had a positive impact on demand for farming inputs.
According to the group, the retail operations continued to be the back-born of the group accounting for 95,4 percent whilst farming operations contributed 4,6 percent of the total turnover.
Although demand increased, a number of challenges still had a knock effect on the business during the period under review among them the Covid-19 pandemic which constrained the group’s trading channels and a general slowdown to economic activity.
“The above average rains received during the period assisted in increasing aggregate demand for agro inputs during the period.
“The group continued to rely on expensive imports of maize and soya given the effects of the 2019/20 drought on local cereals supply. Prices of cereals should soften on the back of an anticipated improvement in agricultural produce following normal to above normal rains received during the 2020/21 rain season,” said chairperson Ms Itai Pasi in a statement accompanying the group’s financials.
During the period, operating profit inclusive of monetary gains increased by 32,1 percent to $318,8 million on increased procurement efficiencies and strengthened cost containment efforts sustained during the period.
The group incurred depreciation expenses of $35,4 million against $35,8 million incurred in the prior period. Interest expenses and mark to market financing costs were $65,3 million compared to $158 million incurred in prior half year.
At $252,7 million profit before tax was 180 percent ahead of same period in the prior year. Entities under judicial management posted a profit before tax of $59,6 million from $217,1 million in the comparable period on monetary gains of $55,4 million realised during the year (2020-$227,5 million).
Profit for the period came in at $73 million from $61 million recorded during same period last year.
During the period under review, the group invested $62,4 million in capital expenditure, which relates to increasing irrigation infrastructure at Glenara Estates and various Farm & City Centre (FCC) branch refurbishments undertaken during the period.
At Farm and City, the introduction of the foreign currency auction system and the use of USD as a mode of payment reinforced stability and assisted the business in sourcing various merchandise efficiently.
Key revenue drivers’ sales volumes improved by 82 percent relative to the prior period, attributable to a resurgence in construction activities and the relatively good 2021/2020 rainy season.
“The improved performance is also attributable to growing demand for Agrifoods’ stockfeed lines after its exit from judicial management in the prior year,” said Ms Pasi.
During the period, Glenara Estate established 570 hectares of commercial maize, 173 hectares of soya beans, and 14 hectares of sugar beans for its summer crops during the 2020/2021 farming season. In addition, the Estate continued with commercial potato production.
Ms Pasi indicated the group remains seized with efforts for Victoria Foods to exit from judicial management, with plans to thereafter further recapitalise all the business units during and beyond the second half of the year.
“In addition, the management of a consistent raw material supply line for Agrifoods and Victoria Foods will remain an on-going priority given the prevailing liquidity situation in the economy and the long delivery lead times for importing critical raw materials and products,” she said.
The group is still continues to make efforts to engage the Zimbabwe Stock Exchange (ZSE) to resolve the outstanding issues pertaining to the suspension of trading of its shares.-herald.cl.zw
