Zimbabwe’s largest cable manufacturer, Cafca Limited, said it had opted not to declare an interim dividend as the board prioritises liquidity to support operations, capacity expansion and working capital requirements.
The Zimbabwe Stock Exchange-listed firm also said retained earnings would sustain production.
During the six months ended March 31, 2026, Cafca invested US$1,39 million in new plant and equipment as part of efforts to expand capacity and enhance productivity.
The decision follows strong growth in both production volumes and profitability during the period.
“Cash pressure is arising from elevated working capital, that is, strategic raw material purchases and higher inventory to secure supply continuity, also capital expenditure and supplier settlements,” Cafca executive assistant Tatenda Dzvairo told businessdigest.
“Given supply chain volatility and the need to maintain production continuity, the board prioritised liquidity flexibility over an interim dividend.”
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Dzvairo said prospects for a year-end dividend would depend on cash conversion, the easing of working capital pressures and trading performance during the second half.
“If working capital tightness eases and cash conversion remains strong, a dividend will be considered at year-end while preserving financial resilience,” Dzvairo said.
Production volumes rose 13% year-on-year during the period, while inventories increased by US$2,93 million.
The inventory build was driven largely by a strategic increase in raw material holdings, particularly copper, to secure continuity of supply amid anticipated constraints and position work-in-progress stock ahead of expected demand from utility and infrastructure projects.
“The US$2,93 million inventory build is largely intentional to insulate production from supply shocks and to support project delivery,” Dzvairo said.
“We are monitoring inventory ageing closely and are taking steps to reduce slow-moving and non-performing stock where identified. The objective is to balance readiness for demand with tighter working capital efficiency.”
To improve power quality and reliability, Cafca is implementing CT compatibility upgrades, generator synchronisation improvements, power factor correction measures, and enhanced monitoring and control systems.
“We are also intensifying engagement with ZETDC to address upstream supply issues,” Dzvairo said.
“While no single measure eradicates all the risks involved, the combined programme substantially increases our confidence that both availability and power quality will improve materially.”