Cable manufacturing company, Cafca says its second half year performance hinges on the availability of foreign currency, as it joins a slew of companies whose operations are being hampered by persistent foreign currency shortages.
BY TATIRA ZWINOIRA
In a statement accompanying Cafca’s half-year results for the six months ended March 31, 2018 last week, company secretary, Caroline Kangara said they were expecting their second half year performance to be similar to the first, but they were worried about foreign currency.
“We are expecting the second half of the year to be at least in line with the first half provided there are no material changes in the availability of foreign currency,” she said.
“Cafca will continue to have an obligation to first meet the requirements of the local market with any excess capacity being exported provided we can timeously source raw material to meet the demands of the export market.”
Kangara said, while government support, resulted in improved local sales, which boosted profitability in the first half, foreign currency shortages were affecting their export ability.
“The same shortage of foreign currency together with our obligation to first meet local demand has had an adverse impact on exports.
“Our biggest competitive advantage in the export market is offering a short lead time from having readily available raw materials,” she said.
In Cafca’s first half performance, the company had a 41,74% increase in revenue to $13,26 million in the period under review from $9,35 million recorded in the comparative 2017 timeframe, as a result of the improvement in local demand.
The improved revenue contributed to a rise in basic earnings per share to 5,44 cents from 0,77 cents recorded in 2017.
Profit after tax increased 683,94% to $1,79 million compared to $228 859 in the similar period last year.
This saw the company with a net profit margin of 13,52%.
“As stated in the update, profitability has been improved by favourable copper prices, changes to trading terms and a change in sales mix from aluminium to copper products,” Kangara said.
She added that they have also managed to reduce their cost base.