Low capacity utilisation hits CFI ops

AGRO-BASED manufacturing group CFI Holdings Limited (CFI) revenue in the first half to March 2016 declined to $19 million from $34,3 million, on the back of overall low capacity utilisation, subdued margins and streamlining costs incurred in the second quarter, the company said.

CFI acting chairman Grace Muradzikwa (pictured) recently said turnover for the period had also slumped 44,2 percent to $19,1 million compared to $34,2 million achieved in the same period in prior year.

“Revenue declined by 63,6 percent, 50,3 percent and 33,8 percent for the poultry, specialised and retail divisions respectively due to the combined effect of a slowdown in overall consumer demand and inadequate working capital during the period,” she said.

Of the total turnover, the poultry division contributed 16,6 percent down from 2015’s 25,4 percent contribution while the specialised unit’s share to turnover also  decreased to 15,3 percent from 17,2 percent however retail share improved to 68,1 percent from 57,4 percent.

“The group posted an operating loss before depreciation and financing costs (Ebitda) of — $4,6 million against — $1,9 million in prior year.

“Financing costs for the period decreased to $700 000 against $2,1 million incurred in the comparable period resulting in a loss after tax for the half-year of $6,1 million against $3,8 million posted in prior period,” Muradzikwa said.

Total borrowings were reduced to $4,1 million from $19 million as a result of the $16 million debt assumed by Fidelity Life Assurance effective October 17, 2015 in the Langford transaction last year.

“With the resolution of the $16 million local debt overhang burden, the board is focused on strengthening its capital base to stabilise the group.

“The inflows from compensation for Saturday Retreat and the Maitlands Zimbabwe land have begun accruing and are being applied towards Group working capital requirements,” the acting chair said.

CFI secured firm interest for purchase of its residual 19 percent stake in Langford Estates valued at $4,3 million, 10 percent stake in Beira Grain Terminal and some land banks for $1,9 million.

The group still has 320 hectares of undeveloped land in Harare South and is pursuing disposal of this land in order to capacitate the various Group operations that are in need of capital.

This comes as the Zimbabwe Stock Exchange (ZSE) last week lifted a suspension it had issued in trading of CFI shares at the beginning of the year, following the group’s compliance with suspension demands.

CFI — whose shares were suspended on January 29 — had failed to publish its September year-end results and recorded a trade during closed period, a factor which also contributed to the temporary blacklisting.

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