eBusiness Weekly
Enacy Mapakame
Agro- industrial concern, CFI Holdings Limited said its FY2018 focus would be on ensuring revival of operations at its two subsidiaries — Agrifoods and Victoria Foods that were put under judicial management.
This will enable the two entities to take advantage of the positive sentiment in the economy that was ushered in by the coming in of a new Government administration.
“The groups’ focus in 2018 is to ensure that operations that were put under judicial management; Agrifoods and Victoria Foods resume production and exploit blossoming market opportunities in the new political dispensation,” said CFI acting group chairperson Itai Pasi.
CFI, which had a stormy 2017 that resulted in a three month suspension from the Zimbabwe Stock Exchange (ZSE) for failing to comply with listing requirements, finally released its financial results for the year to September 30, 2017 that showed entities under judicial management and not consolidated during the year incurred a loss before tax of $3, 1 million.
This was mainly driven by depreciation and care and maintenance costs with the judicial manager working on initiatives to resuscitate operations.
Such efforts have seen Agrifoods Bulawayo increase throughput since April 2017. Additionally, a joint operation that will see resumption of operations at Victoria Foods Flour mill plant was concluded in September and should see flour supplies to the market in financial year 2018.
Overall, the group returned to the black after posting $0, 8 million profit for the year compared to a $45 million loss incurred in the prior year.
Group turnover for the year jumped 45 percent to $46 million compared to $29,3 million achieved in the prior year.
Of the total turnover, retail and farming divisions contributed 93,9 percent and 6,1 percent respectively.
Farm and City’s turnover was 94 percent above prior year at $40 million on the back of improved stocking and the favourable impact of the above normal rainfall throughout the country that resulted in increased demand for agro-inputs.
Its margins improved by 3 percent during the year.
Farm and City opened six new branches while three were relocated to better locations underpinning the revenue and profitability growth realised during the year.
Earnings before interest, taxes, depreciation and aromatisation (EBITDA) was a $2,8 million positive contribution against a loss of $41,6 million incurred in the prior year.
Financing costs for the year under review decreased to $0, 6 million from $2,9 million incurred in the prior year on the back of a decrease in borrowing levels following a $1,6 million debt for land swap consummated at the end of the financial year 2016.
Resultantly, CFI reported a profit before tax of $1,5 million compared to a $47 million loss incurred in the prior year, taking into account a once off $31,4 million provision on intergroup balances for entities under judicial management.
The group maintained prior year levels on capital expenditure at $0, 5 million. Total borrowings marginally increased to $3, 8 million from $3, 6 million owed in the prior year.
In the outlook period, the group will look at enhancing operations mainly recapitalisation of its subsidiaries under judicial management.
CFI did not declare a dividend in line with need to conserve capital.
