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Padenga Holdings (Padenga), is 40 percent shy of its annual production target, two months away from the company’s financial year end

Taurai Mangudhla Senior Business Reporter
Zimbabwe Stock Exchange (ZSE) listed crocodilian skins and meat producer, Padenga Holdings (Padenga), is 40 percent shy of its annual production target, two months away from the company’s financial year end.

Although the company indicates the Zimbabwe operation is expected to sell 46 000 premium quality skins by December 2017 on strong demand, latest figures obtained from the listed entity show that it has managed to sell 28 000 skins out of the projected 46 000 it is targeting for December 2017.

“We have sold approximately 28 000 skins of the target 46000. Demand for top quality skins remains steady. As predicted, prices are also holding at prior year level,” Padenga financial director financial director Mr Oliver Kamundimu, told The Herald Business in emailed responses.

This means the company has sold 61 percent of its annual target over the past 10 months. Padenga’s Zimbabwe crocodile operation is crucial to the business, accounting for 88 percent of the group’s turnover in 2016.

“Turnover increased by 7 percent to $27 527 638 from $25 748 883 recorded in the prior period to December 2015,” Padenga said in the 2016 annual report.

The company sold 47 909 contract skins sold 2016, representing an increase of 4 percent over the volume in the previous period.

“Total meat volumes sold decreased by 24 percent to 220 tonnes from 290 tonnes (FY15). The sales mix shifted towards lower value cuts resulting in average prices received reducing by 1 percent,” the company said.

According to global statistics, more than one million crocodile skins are traded on the international market every year, from about 30 countries across the world. Zimbabwe, Zambia and South Africa are the largest operators of crocodile farms and crocodile skins producers in Africa with Zimbabwe earning about $30 million in exports annually.

Padenga’s alligator business reported a 143 percent leap in volumes against prior period to close the year at 20 835 skins compared to 8 586 skins. Of the total alligator skins sold 7 994 were low quality skins harvested at the end of the prior year, said the company, adding that the unit recorded turnover of $3 745 074, this being an increase of 155 percent against prior year.

As recently reported by our sister publication, The Business Weekly, Padenga has shelved a decision to buy back its own shares on account of a firming share price. The share buyback was meant to increase shareholder value by reducing the number of shares in circulation and in turn increase earnings per share and ultimately increase the share price.

“The company has not yet bought back any shares,” Mr Kamundimu said, adding “The Padenga share price has increased phenomenally from 21 cents at the time of the AGM to the current 81 cents.

The objectives of the share buy-back have been realised before the company bought any shares.

“If there is a ‘correction’ of prices on the market, the company will implement the share buy-back strategy to increase shareholder value.”

These crocodile and alligator skins have major market mainly in Europe and they are used to make such products are belts, shoes, bags among others.