HomeNewsCAFCA after-tax profit declines

CAFCA after-tax profit declines

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ZIMBABWE Stock Exchange-listed manufacturing concern CAFCA has recorded a 15% decline in after-tax profit to $1,416 million for the full year to September compared to the same period last year dragged by depressed margins on exports stiff competition from cheap imports.

Tarisai Mandizha

Revenue marginally rose to $23,9 million for the period under review from $23,1 million in 2012.

In a statement accompanying the group’s audited financial results for the period ending September 30, CAFCA chairperson Honour Mkushi said operating profit declined by 13 % to $2 million from $2,4 million during the same period last year.

“Cost increased in line with inflation, but the impact of depressed margins on exports and combating imports on price locally resulted in reduced operating profit of $2 million being 13% below the previous year,” Mkushi said.

CAFCA’s total assets turnover, a measure of how much assets are being used to generate sales, stood at 1,7 million.

Mukushi said CAFCA increased volume sales by 8% year-on-year which only translated into increased turnover of 3% manly due to sales mix of more aluminum which sells at less dollars per tonne than copper and also due to increased volume which also sells at less price per tonne.

In the period under review profit before tax declined to $1,9 million as compared to $2,3 million on the same period last year. Mkushi said borrowings increased to $1,7 million from $1 million mainly to fund the copper barter deal with power company ZETDC which resulted in a 76% increase in finance charges to $157 455.

“The budget of 2014 has been based on worst case scenario of no growth due to the tight liquidity being experienced in the overall economy. The focus will continue to be on the copper barter project whilst our strategy of combating imports on price will remain,” Mkushi said.

Mkushi said the company’s balance sheet reflected an improved position despite the fact that borrowings increased by
$633 351.

The group’s current ratio, which measures the company’s ability to meet current liabilities, was at 3,5 during the period under review, a figure above the minimum efficiency of 1.

During the period under review current assets of inventories and receivables were $10,8 million which was 3,5 times the current liabilities of borrowings, while payables and net worth of the company increased by $1,4 million.

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