Online Reporter
Nelson Gahadza, Zimpapers Business Hub
Cafca Limited’s sales volumes for the third quarter ending June 30, 2025 grew by 31 percent compared to the previous quarter (Q2), although they were 14 percent lower than the same period last year, largely due to reduced uptake from the utilities sector.
In a trading update, the company reported that year-to-date volumes were 16 percent behind the prior year, with copper cables down six percent and aluminium conductors and cables down 37 percent.
“Liquidity constraints affected the utility sector’s uptake, which declined by 49 percent during the quarter under review compared to the prior year. Cafca is actively engaging relevant stakeholders to improve terms and conditions that will facilitate increased uptake,” said company secretary, Mrs Caroline Kangara.
She noted that commercial activity during the quarter was buoyed by the construction sector, which rose by 19 percent, and the manufacturing sector, which increased by 11 percent compared to the same period last year.
“However, volumes from the mining sector declined by 62 percent, impacted by a slowdown in commodity prices, while retail and distribution volumes rose by 23 percent year-on-year, reflecting successful engagement with distributors and end consumers,” said Mrs Kangara.
During the quarter, Cafca also enhanced customer experience by upgrading the sales reception at its factory shop.
Cafca is a leading manufacturer and supplier of cables for the transmission and distribution of electrical energy and information.
Export volumes for the quarter remained flat due to persistent liquidity challenges in key markets, which affected payment remittances.
Mrs Kangara said management continued to pursue manufacturing excellence through equipment upgrades aimed at eliminating bottlenecks.
The company transitioned from a three-shift to a two-shift system and introduced a new production planning philosophy.
“The commissioning of a new stranding machine notably boosted aluminium conductor and cable capacity,” she said.
Despite a four percent decline in production compared to the prior year — aligned with reduced demand — sales hit rates exceeded expectations, and stock levels remain sufficient to meet market needs.
Mrs Kangara added that Cafca will continue exploring partnerships with utilities and export markets to optimise factory utilisation.
On financial performance, she said revenue tracked volume performance, with year-to-date revenue five percent lower than the prior year.
Margins were affected by increases in average material costs, with copper up 15 percent and aluminium up 28 percent on a year-to-date basis.
“Due to heightened competition, increased material costs were absorbed into margins. Other operating costs remained largely unchanged,” she said.
Mrs Kangara noted that management is focused on expanding earnings before interest, tax, depreciation and amortisation (EBITDA) margins through supply chain optimisation, conversion cost efficiencyand administrative modernisation.
The company indicated that the stable trading environment is expected to continue, with gross domestic product (GDP) projected to grow by six percent, driven by agricultural recovery.
“While Cafca anticipates a rebound in sales volumes, margin pressure will persist as the company defends its market share,” Mrs Kangara said.
She concluded by outlining the company’s priorities going forward, which include strengthening engagement with utilities, mines, distributors and contractors; enhancing internal efficiencies to improve margins; pursuing manufacturing excellence and safety; and increasing communications to reinforce brand strength.
derick.khumalo