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Crocodiles

Business Reporter

Crocodile skins and meat producer, Padenga Holdings, expects a more solid performance this year based on an excellent crop of crocodiles on the ground coupled with “good” cash and working capital management. Ongoing initiatives to further animal welfare are expected to contribute towards improved skin quality according to the group’s chairman Alexander Calder.“The fundamentals of the business remain sound. We anticipate another good year,” said Mr Calder.

He said improving crocodile skin sales volumes and quality grades helped the group to record profit $7,3 million attributable to shareholders for the year ended December 31 rising from $6 million in the prior year although turnover retreated to $27 491 537 from $27 969 684 in the prior year.

Padenga said the positive profitable position was a result of the production of skin size profiles requested by customers coupled with stringent cost management. Cash generated from operating activities doubled to $13 662 136 in the period under review from $5 408 148 in the comparative period.

“This increase in cash generation was mainly attributed to an increased operating profit and a decrease in debtors of $3 497 123. The decrease in debtors was a function of finishing culling earlier in the period under review and collecting the bulk of sales revenue before year-end.

“There was also a decrease in cullable biological assets (excluding fair value adjustments) by $1 040 476 as we culled crocodiles in the period under review,” Mr Calder said.

The group’s flagship crocodile operation, accounting for 94 percent of turnover grew turnover by seven percent to $25 748 883 in the year to December from $24 079 194 recorded in the prior year.

The 46 025 contract skins sold in the current year represented an increase of seven percent over the volumes in the previous period. Operating profit increased by 27 percent to $10,26 million from $8,06 million for the prior year and profit before tax at $11,43 million grew by 42 percent from $8,03 million in the comparative period.

The group’s US alligator operation however, had disappointing results with turnover falling by 55 percent to $1,74 million from $3,89 million recorded the year before. Volumes were down 42 percent to 8 586 skins compared to 14 890 skins in 2014.

The alligator unit recorded a loss before tax of $346 782 compared to $843 105 for the prior year.

Padenga blamed the negative position of disruptions to operations which contributed towards lower skin quality, lower skin volumes and depressed prices.

Harvesting of some medium sized animals was deferred to this year in an attempt to improve quality. The prices attained on skins sold were consequently lower than both budget and prior year.

The group said approximately 8 000 skins harvested last December had not been graded or invoiced at year end and sales for these skins will be recorded in 2016.

Padenga Holdings increased its shareholding in Lone Star Alligator Farms to 67 percent from 50 percent following the withdrawal of one of the members in April last year.