…but revenue up 9.9% in Q1
By ETimes
CFI Holdings’ inflation adjusted revenues for the quarter ending 31 December 2022 surged by 9.9% over the prior year period despite a challenging operating environment.
The company was not spared from the ongoing power challenges and the effects of the Russia-Ukraine conflict on its operations.
“The operating environment was characterized by periods of high annual inflation and the pass-through effects of the war in Ukraine affecting global supply chains and the prices of key commodities.
“The trading environment also witnessed the resurgence of acute power supply shortages affecting the Country’s productivity levels and increasing the costs of doing business,” the company said.
Policymakers instituted a raft of measures in the period under review to stabilise the exchange rate and tame the runaway inflation.
“This, however, resulted in liquidity constraints on the local currency as the use of the foreign currency increased,” it said.
On business performance, sales volumes for the Retail division’s key revenue drivers, excluding fertilizer, increased by 9% relative to prior year.
“However, fertilizer sales were constrained by the commodity’s significant real price increases following the war in Ukraine which disrupted global supply chains. This was further exacerbated by the depressed producer prices for tobacco and maize coming into the current season.”
The performance of Agrifoods’ sales volumes was unchanged from the prior period’s levels as the demand for stockfeeds remained flat in the face of wider economic difficulties.
Following a productive winter wheat season, Victoria Foods enjoyed stable wheat supply during the quarter, according to the company.
However, sales volumes fell by 19.8% compared to the prior year.
“This was a result of the flour mill operating under subdued capacity following power supply shortages, whilst maize supply constraints subdued the maize mill operations,” it said.
The Glenara potato harvest fell by 5% due to limited seed supplies. But the Estate expanded its commercial soya bean and maize planting area by 11% and 19%, respectively, over the comparative period.
“This should assist in underpinning raw material supplies to Victoria Foods and Agrifoods.”
CFI expects aggregate demand to be high due to a favorable agricultural season, which typically increases consumer expenditure on essential foods, farming, building, and mining operations.
“The Group will therefore remain focused on exploiting any opportunities to contribute to the overall business performance, whilst monitoring its operating costs in light of hardening costs and periods of stagnated growth,” the company said in its outlook.
CFI Holdings Limited is currently the ninth most valuable stock on the ZSE, with a market capitalization of $60.3 billion, which makes up about 2.1% of the Zimbabwe Stock Exchange equity market – Harare