CAFCA, the only cable manufacturer in Zimbabwe, says its export volumes declined by 34 tonnes in the first quarter ended 31 December 2022 but it remains optimistic about the second quarter’s performance.
While the company is a subsidiary of a larger South African cable manufacturer that also serves regional markets, ETimes previously forecast that external markets are unlikely to offer extensive opportunities for CAFCA.
“Our customers in Malawi continue to experience difficulty in obtaining foreign currency so stock replacement there is slow,” the company said in a trading update.
“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.”
The company said: “Rwanda is steady and we are expecting an order in March to DRC. We have opened a consignment stock arrangement in Tanzania.”
Local volumes for the period were 8% lower than they were for the same quarter previous year. According to the firm, the utilities sector and factory cash sales suffered the most.
“Utilities will pick up in the next quarter with 2 of the 3 Utilities placing new orders and the barter deal hopefully improving as the focus reverts to harvesting and not faults,” it said.
“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.”
CAFCA said it has enough stocks to serve the market.
“CAFCA has 3 months sales cover in finished goods stock giving us the ability to meet the +/- 1400 stock lines the market requires in relation to our weekly production target of 16 line items,” it said.
“We believe that the next 3 months’ volume will be higher than the current quarter’s volume.”
It repaid all of its Zimdollar borrowings in response to the banks’ raising interest rates.
In comparison to the same period last year, the historical year-to-date turnover and profit have climbed by 375% and 595%, respectively.
Cafca Limited is currently the 33rd most valuable stock on the ZSE, with a market capitalization of $10.1 billion, which makes up about 0.35% of the Zimbabwe Stock Exchange equity market.