malvernmugadzikwa
Business Writer
Listed cable manufacturer, CAFCA, says its export volumes for the financial year ended September 30, 2022 declined 10 percent from the comparative period owing to foreign currency constraints in the Malawi market.
Total sales volumes were 96 percent of 2021 total sales.
“The decline was due to decline in demand after review of interest rates to 200 percent in July from 40 percent.
“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 percent of turnover, followed by retail at 16 percent, mines at 11 percent, and utilities completing the list at 6 percent.
“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 percent to $2,2 billion. The company’s inflation adjusted operating profits were up 187 percent to $6,6 billion.
Revenues climbed upwards 42 percent to $21,3 billion, despite the company reporting a 4 percent fall in volumes. The decline was attributed to the adverse effects of the tight monetary policy on consumer demand. Of the revenues earned, 92 percent were from local sales and 8 percent were from external customers.
At the end of the financial year, the company’s total assets stood at $12,9 billion, with cash holdings of $576 million and inventories worth $9,7 billion. Total liabilities stood at $4,9 billion, with borrowings of $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.
Online Reporter