BUSINESS REPORTER
Diversified conglomerate CFI Holdings has reported strong performance in the quarter to December 31, 2023 in spite of severe economic headwinds and drought brought by ElNino, Business Times can report.
Despite significant inflation, exchange rate fluctuation, and local currency depreciation, the company did very well during the period under review , considering that CFI performance was generally subpar.
Company secretary Panganayi Hare stated in a trading update that most divisions saw some improvement in the period under review.
“Overall, the group’s inflation-adjusted revenues for the quarter, at ZWL$159.8bn were 544% higher than ZWL$24.8bn the comparative prior year period,” Hare said.
“During the period, sales volumes for the retail division’s key revenue drivers increased by 16% to 21,453 tonnes from 18,446 tonnes sold in the comparative prior year period. Improved fertiliser sales followed the reduction in prices to normal levels following the price spike in prior year as a result of global supply chain disruptions emanating from the Russian-Ukrainian conflict. Agrifoods’ sales volumes for the quarter at 9,832 tonnes were 18% above 8,313 tonnes sold in prior year.
“The significant achievement in a difficult operating environment was due to improved product availability resulting from strategic agreements with suppliers of key raw materials,” he said.
Victoria Foods’ wheat flour sales volumes at 3,916 tonnes remained almost stagnant against prior year level, registering a 3% growth from 3,802 tonnes and this was attributable to stable wheat supplies during the quarter.
However, periodic power disruptions hindered significant expansion.
Conversely, maize meal volumes increased by 10% to 1,647 tonnes from 1,497 tons, according to Hare, as a result of better raw material sources.
Additionally, thanks to better seed supplies, Glenara Estates’ potato harvest doubled to 2,989 tonnes from 1,468 tonnes in the prior comparative period. However, the crop’s average selling prices fell by 8% from the prior quarter, mostly as a result of an abundance of the crop on the market. During the time of joint operations, the Estate continued to breed cattle and fatten them in pen systems with a fair amount of success. Regarding the forecast, CFI is cautious about weather experts’ predictions of less rain than usual in the 2023–2024 growing season due to an El Nino phenomenon–induced drought that is expected to impair regional agricultural productivity.
In order to maintain operations, management must use strategic approaches for acquiring raw materials and diversify its retail lines to reduce reliance on agro-inputs.
All things considered, the group expects the FY2024 economic downturn to continue being difficult, and continuous cost containment measures will be carried out.
