Michael Tome Business Reporter
LISTED cable manufacturer Cafca’s inflation adjusted profit for the year ended September 30, 2019 marginally grew by 0,25 percent to close the year at $18, 8 million from $18 ,7 million prior year comparative, amidst a 24 percent decline in volume uptake.
Cafca published two sets of results showing historical numbers as well as inflation adjusted ones which we refer to in this report.
The firm’s reporting follows the Public Accountants and Auditors Board of Zimbabwe (PAAB) call that requires all Zimbabwean entities with reporting periods ending on or after July 1, 2019 to apply hyperinflationary accounting.
Cafca’s inflation adjusted revenue for the period under review modestly grew by 25, 7 percent to $173, 1 million compared to $137, 6 million in the prior comparable period whilst operating profit jumped 219 percent in the positive to close the year at $75, 6 million from $ 23 ,7 million in 2018.
The company’s revenue was derived mainly from Zimbabwe based customers as they consumed $165, 7 million worth of Cafca’s produce from $115, 5 million last year, as exports recorded $7, 3 million of the total revenue for the period under review.
Local customer base consumed 95, 8 percent worth of Cafca’s produce, attributing 4, 2 percent volumes uptake to exports.
Overall volumes dropped 24 percent, a number which the company attributed to the movement in exchange from a 1 to 1 in February to the present which has multiplied by fifteen times.
“Low volumes uptake is attributable to the movement in exchange rates which moved from 1 to 1 exchange rate at the beginning of the year and closed 15 to 1 at the end of the year,” said Cafca in a statement accompanying the financial results.
Going forward the company says it has put place measures to counter the economic headwinds presently experienced in the country.
“Looking ahead the company is well placed to take advantage of any opportunities that may arise in either the local or export market and has adopted adequate mitigating strategies against the challenging local economic environment,” said CAFCA.