CFI registers strong quarterly revenue jump

Tapiwanashe Mangwiro

Senior Business Reporter

Zimbabwe Stock Exchange (ZSE) listed diversified agricultural concern, CFI Holdings, registered strong growth in sales volumes across key revenue drivers in the first quarter to December 31, 2023.

In the retail division, key revenue drivers experienced marked growth in sales volumes, after seeing a 16 percent jump to 21 453 tonnes compared to the same period the previous year.

In a trading update for the period review, CFI said: “This surge can be attributed to the normalisation of fertiliser prices following global supply chain disruptions stemming from geopolitical conflicts”.

Similarly, the group’s unit Agrifoods witnessed a robust performance, with sales volumes soaring by 18 percent to 9 832 tonnes, driven by strategic agreements with key raw material suppliers. 

The agreements ensured improved product availability, mitigating the challenges posed by the challenging operating environment.

However, the Victoria Foods unit encountered a mixed fortunes, with wheat flour sales volumes stagnating at 3 916 tonnes, albeit recording a modest 3 percent growth.

“Stable wheat supplies were counteracted by intermittent power outages, which hampered substantial growth potential. 

“Conversely, maize meal volumes surged by 10 percent, reaching 1 647 tonnes, driven by enhanced raw material supplies,” the group added.

Glenara Estates demonstrated remarkable growth after doubling potato harvest to 2 989 tonnes, driven by improved seed supplies. 

Nonetheless, this achievement was dampened by an 8 percent decline in average selling prices due to market oversupply.

Despite this, Grenara Estates cattle breeding and pen fattening activities continued with reasonable success, contributing to overall operational resilience.

The first quarter demonstrated exceptional performance, with the group recording a 544 percent vault in inflation-adjusted revenue terms to $159,8 billion. 

The outstanding financial achievement sets the stage for a deeper dive into the operational dynamics that underpin such remarkable growth.

As for the operating environment, CFI said it remained challenging, characterised by the continued depreciation of the Zimbabwe Dollar against the United States Dollar and inflationary pressures.

“This was aggravated by the delayed onset of the rainy season and prolonged dry spells, typical of the predicted El Nino phenomenon. This had the effect of dampening most farming-related economic activities,” the trading update said.

Despite the challenging operating landscape, CFI’s strategic initiatives and operational resilience have propelled the company to greater heights.

In their outlook, the group said, “Weather experts project that the 2023/2024 agricultural season will receive lower than normal rainfall induced by the El Nino phenomenon set to reduce agricultural output in the region.

“Management is tasked with imploring strategic raw material procurement strategies to sustain operations, whilst also diversifying its retail lines away from dependence on agro-inputs.”

Overall, the group anticipates the full year 2024 economic outturn to remain the same, and ongoing cost containment measures will continue to be implemented.

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