Listed cable manufacturer CAFCA says its export volumes for the financial year ended 30 September 2022 declined by 10% from the comparative period owing to foreign currency constraints in the Malawi market.
Total sales volumes were 96% of 2021 total sales.
“The decline was due to decline in demand after review of interest rates to 200% in July from 40%.
“Covid 19 pandemic eased off in 2022 and this also increased competition in the export markets,” the company said in its 2022 annual report.
Most of CAFCA’s revenue comes from the domestic market. Utilities, distributors, construction and industry, mines, and cash customers make up the domestic market.
Cash sales made up 31% of turnover, followed by retail at 16%, mines at 11%, and utilities completing the list at 6%.
“Sales also continued to be sustained by the protection against imports put by the government through Statutory Instrument SI 122 as was the case in 2021.”
CAFCA rebounded to profitability in its financial year ended 30 September 2022 as net profits after tax increased by 323% to ZWL$2.2 billion. The company’s inflation adjusted operating profits were up 187% to ZWL$6.6 billion.
Revenues climbed 42% to ZWL$21.3 billion, despite the company reporting a 4% fall in volumes. The decline was attributed to the adverse effects of the tight monetary policy on consumer demand. Of the revenues earned, 92% were from local sales and 8% were from external customers.
At the end of the financial year, the company’s total assets stood at ZWL$12.9 billion, with cash holdings of ZWL$576 million and inventories worth ZWL$9.7 billion. Total liabilities stood at ZWL$4.9 billion, with borrowings of ZWL$1.7 billion.
Looking ahead, the company expects the tight liquidity conditions to hold. However, it expressed confidence in its capacity to sustain profitability and a positive cash flow position through local and export market initiatives – Harare