ZIMBABWE Stock Exchange-listed cable manufacturer CAFCA posted a 36% increase in profit after tax of $779 578 for the six months ended March 31.
Victoria Mtomba
The company recorded $573 954 profit in 2014. The group said in a statement finance costs were down to $50 738 compared to $59 476 in the six months to March 2013.
“The impact of moving from low margin exports to higher margin recycling project was reflected in the much improved operating profit which increased by 27% from $831 597 to $1 060 325. The benefit to the country of recycling and not importing copper for six months was $3,15 million,” the company said.
CAFCA recorded a 21% decline in revenue during the six months period to $10 million due to a change in strategy to reduce exports and focus on the project of recycling copper locally.
The group expects finance costs to be minimal as borrowings have been eliminated. The group will not be borrowing this year.
Going forward, CAFCA said there would not be any improvements in local sales and the company will rely on copper recycling project.
CAFCA entered into a barter deal with Zesa last year. In the past the company used to recycle copper from Zesa in exchange for aluminium. At an annual general meeting held in February this year CAFCA managing director Rob Webster said it cost $8 000 to buy a tonne of copper while it costs $3 000 to buy a tonne of aluminium.
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He added that the company will not be buying any copper this year, but will instead rely on recycled copper.
Last year, the company’s borrowings increased to $1,7 million to fund the copper barter deal with power company ZETDC which resulted in a 76% increase in finance charges to $157 455.
Webster said the company would start importing copper from Zambia in the event that stocks run out in Zimbabwe.
