LISTED cables manufacturer Cafca Limited says its export volumes declined by 34 tonnes in the first quarter of 2022 compared to the same period last year due to foreign currency constraints in the Malawi market.
Cafca has three months of sales cover in finished goods stock, giving it the ability to meet the 1 400 stocklines the market requires in relation to its weekly production target of 16 line items.
“Export volumes were 34 tonnes down in the current quarter versus the same quarter last year. Our customers in Malawi continue to experience difficulty in obtaining foreign currency so stock replacement there is slow.
“Mozambique in the comparative period had a large once-off order which was not repeated in the current year yet there is a large order to be delivered in March which will close the shortfall to this region. Rwanda is steady and we are expecting an order in March to DRC. We have opened a consignment stock arrangement in Tanzania,” the company said in its quarterly trading update for the period October to December 2022.
The cables manufacturer recorded an 8% drop in its local volumes mainly due to a decline in its utilities sector and factory sales.
“Utilities will pick up in the next quarter with two of the three utilities placing new orders and the barter deal hopefully improving as the focus reverts to harvesting and not faults. Factory cash sales were down as a result of an uncompetitive US dollar price which has since been resolved with the change in the retention rules,” the company revealed.
Cafca added that it has repaid all its Zimdollar borrowings.
The company’s historical year-to-date turnover and profit against the same period last year increased by 375% and 595%, respectively.
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However, most of Cafca’s revenue comes from the domestic market.
Utilities, distributors, construction industry, mines, and cash customers make up the domestic market.