By ETimes
CAFCA, the country’s only cable manufacturer, expects a rise in volumes in the second quarter, covering January to March 2024, despite a challenging operating environment.
The company’s long-term prospects are tied to key drivers of economic development in electrical and telecommunications infrastructure.
In a quarterly update, the firm revealed that the number of conductors sold has increased by 2.50% to 573 tonnes in Q1 2023/2024 (Oct 2023 to Dec 2023) from 559 tonnes in the comparative period.
The current quarter saw a 32-tonne increase in export volumes compared to the same quarter last year.
“The foreign currency situation in Malawi has improved resulting in more direct sales to that country. All the other markets have remained steady,” the company said.
“Local volumes for the quarter were 3% down on the same quarter last year with the drop being mainly in the industry sector and factory cash sales. The decline in factory cash sales was offset by an increase in the retail sector.”
As for financials, CAFCA’s topline and profit have surged historically this year by 718% and 503%, respectively, compared to the same period last year.
The firm is a subsidiary of a larger South African-based cable manufacturer that also serves regional markets, so external markets, analysts say, are unlikely to offer extensive opportunities for CAFCA.
There could be scope for CAFCA to serve as an “off-shore” processing site for its parent company. As South Africa looks to invest heavily in its electricity infrastructure, CAFCA could benefit from some spillover.
The current share price of CAFCA Limited is $4,505 with a market cap of $149 billion.