CFI loss widens despite surge in revenue
CLOUDINE MATOLA
CFI Holdings limited, a listed diversified conglomerate, reported a wider loss in the 12 months to September 30, 2023, due to high costs despite the company’s revenue surging, Business Times can report.
Revenue for CFI Holdings, which operates Farm and City Centre, Glenara Estate, Saturday Retreat, Langford estate, Victoria Foods and Poultry Division among others, rocketed 245.7% to ZWL$201.99bn in the period under review from ZWL$58.43bn reported in the prior comparative period.
Itai Pasi, the chairperson of the CFI board, stated that the revenue increase was a reflection of the discrepancy between the year-over-year rapid inflation of the Zimbabwe dollar and the muted official inflation data.
Retail operations, Pasi said contributed 76.3% to the group turnover while the farming operations accounted for 3.4%. The balance was contributed by other operations.
CFI incurred unrealised exchange losses of ZW$139.5bn for the period under review.
Expenses for the company increased in real terms because suppliers and service providers are pegging expenses in United States dollars but convert to Zimbabwe dollars at prevailing parallel market rate.
“Expenses increased in real terms as a consequence of these expenses being pegged by suppliers and service providers in United States dollars but converted to Zimbabwe dollars at prevailing parallel market exchange rates,” Pasi said.
Farm and City Centre’s sales volumes decreased by 15% from the previous year as a result of the challenging operating climate, which was marked by fluctuating exchange rates, high loan rates, and a decline in consumer spending.
The declaration of the El Nino phenomenon-caused drought in 2023–2024 is expected to keep sales of important agricultural volume drivers, such as pesticides and fertilizers, low.
Sales volumes of Agrifoods increased by 31% from prior year on the back of improved raw material availability on the local market from a good 2022/2023 agricultural harvest.
Victoria Foods volumes declined by 14%, due to intermittent power cuts affecting production.
Additionally, the maize mill was seriously affected by raw material supply challenges during the period. Also apart from the shortages, raw material prices also rose from prior year level, ultimately depressing the division’s financial performance.
Pasi stated that in order to weather this challenging time, the group will use proactive management techniques because of the predicted El Nino’s negative consequences.
“The operating environment is forecasted to remain challenging and complex in the medium term aggravated by the now prevailing El Nino induced 2023/24 phenomenon which is set to reduce agricultural output in the region.
Given that the agricultural sector is a mainstay to the Group’s operation, proactive management practices will therefore be employed to ensure the Group’s survival in these difficult times, “ Pasi said.
In order to support its long-term competitiveness, she added, the group will prioritize further investments in its milling operations going forward, in the near to medium term.
Additionally, in order to support the development goals of the government’s Vision 2030, long-term attention is still focused on the creation of affordable homes in Harare South.
