Cafca optimistic of 5-fold growth in earning

Business Reporter
LISTED cable manufacturer Cafca is optimistic of a five-fold growth in per share earnings to $0,045 per share, up from $0,007 per share in the first half of its financial year ending September 2018 compared to the same period prior year on account of favourable copper prices and improved trading terms.

The company also experienced changes in sales mix from aluminium to copper products, according to a profit warning statement.

“Shareholders are advised that basic earnings per share and headline earnings per share for HI FY 17/ 18 will be approximately 4,5US $ cents per share which is above the 0,7 US $ cents per share of HI FY 16/ 17,” Cafca said.

“Profitability has been improved by a favourable copper price, changes to trading terms and a change in sales mix from aluminium to copper products. The prior year was adversely affected by a volume decrease that resulted in break-even months until the cost base was significantly reduced — this cost base has since been maintained,” added the company.

Cafca, also listed on the Johannesburg and London Stock Exchanges, said the financial information on which the statement is based has not been reviewed and reported on by its external auditors.

“Shareholders are therefore advised to exercise caution in the trading of their Cafca shares before the official announcement of the half year results in May 2018.”

In its latest annual results for the period ended September 2017, Cafca reported a $726 213 after tax profit, up from $418 604 in 2016 on account of growth in operating profit.

CEO Rob Webster said despite a difficult operating environment, the company managed to grow volumes by 8 percent and turnover by 6,4 percent.
The company managed to generate cash of $4 million by improving working capital.

The company’s two shift operation is producing between 180 and 200 tonnes a month which is enough to meet demand.
The company made a strategic decision in September to decommission its furnace that had lasted 32 months against a useful life of 18 months. The new furnace is expected to last until mid-2019.

Chairman Honour Mkushi, however, said foreign currency challenges are expected to be a challenge to the business.