CAFCA has registered a 73,48% increase in profit after tax to $726 213 in the year ended September 30 from the comparable period last year on the back of a revenue increase that was complemented by a lower cost base.
BY TATIRA ZWINOIRA
In a statement accompanying the company’s financial results released yesterday, Cafca company secretary Caroline Kangara said the revenue increase of 6,4% to $19,31 million was as a result of a lower cost base.
Revenue in the same period last year was $18,14 million while net earnings were $418 604.
“With the revenue increase complementing the lower cost base, profits increased 80% year on year. Of the $1,2 million profit before tax $100 183 was an export incentive received from the Reserve Bank of Zimbabwe on our receipts in the period,” she said.
The result of the increased profit after tax led to the basic earnings per share rising by 73% to 2,21 cents from 1,28 cents last year showing gains for shareholders.
The cable manufacturing concern also experienced a 182,85% increase in its cash and cash equivalents to $4,16 million from $1,47 million recorded in 2016 on the back of an improvement in working capital.
The jump contributed to an overall improvement of current assets which increased to $14,83 million by the end of the period under review from $13,19 million last year. It also contributed to total assets increasing by 10,08% to $18,11 million from what was recorded in the same period last year — $16,45 million.
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The improvement of current assets led to an improvement in the company’s liquidity as Cafca registered a current ratio of 7,94 showing it was in a good position to pay its short term and long term obligations.
As a result, Cafca managed to record zero financial costs during the period, an improvement from a 2016 comparative of $79 168.
However, Kangara said trade and other payables, increased to $1,49 million from a previous 2016 figure of $735 654.
The problem seems to be in line with other manufacturers who have found it hard to remit foreign currency outside the country to their suppliers.
“Foreign currency is key to maintaining our supply of raw materials and enabling us to replace ageing plant. We also appreciate our responsibility to generate foreign currency through exports and to meet all long term customer needs,” she said.
She added that despite the challenge they had been benefiting from import protection which they would use to improve their competitiveness by replacing outdated machinery, implement cost containment measures and increase efficiency.
