adminConrad Mwanawashe Business Reporter
CFI HOLDINGS expects the proposed restructuring of the group to return it to profitability this year to recover from a loss of $25 million incurred in the year to September 2015.
Excluding retrenchments, the group posted an operating loss before depreciation and financing costs of $9,96 million against a loss of $6,3 million in prior year.
CFI has already made some management changes which saw the group retire chief executive Steve Kuipa and chairman Simplicius Chihambakwe.
Former finance director Acquiline Chinamo was last year retrenched under a negotiated agreement and not under impropriety allegations as was previously reported.
Director Hamish Rudland said during a tour of Glenara Estates by The Herald Business last week that as part of the recapitalisation programme, about $2 million has already been poured into the company with particular attention on the farming business at Glenara Estate.
The farming business is expected to become torch bearer for the group going forward in anticipation of a boom in agriculture expected in the next five years.
“The agriculture division will be a stand-alone and because of the potential of agriculture and the deficit that we are currently facing in terms of food supply.
“We want to expand the agricultural portfolio within CFI very aggressively especially over the next five years.
“Over the next five years that’s when agriculture is going to boom and we want to be part of that,” said Mr Rudland.
To that effect, new commercial equipment has been acquired for the Glenara Estates.
The new equipment includes erection of new centre pivots, tractors, rehabilitation of boreholes and water reservoirs.
The project also involved resuscitating existing infrastructure including boreholes, centre pivots and the water reserve tank while all the eight boreholes were resuscitated. New centre pivots were also erected to add to the existing two.
The farm will focus mainly on potato production but will also produce maize and maize seed.
Based on these investments, this year, CFI expects to make $2 million net.
“Since we got involved, things have changed. On this farm (Glenara Estates) CFI should make close to $2 million net from a loss position of $19 million made last year,” said Mr Rudland.
To achieve that, 200 hectares of land will be put under potato this winter, adding to the 100 hectares currently being harvested.
Average yield for the first bloc harvest is at 43 tonnes per hectare but is excepted to hover around 50 tonnes per hectare for the remaining blocs, about 80 hectares yet to be harvested.
“Our vision is to get to an extent where we will be harvesting potatoes every day and planting. We want a continuous cycle so that we do not have to stop our machines,” said farm manager Clear Matangi.
In the year to September 2015, excluding residential stand sales of $15,1 million by Saturday Retreat, group turnover from normal trading for the year declined by 27,8 percent to $51,4 million compared to $71,1 million achieved in the same period in prior year.
Retail and poultry divisions revenue receded 26,9 percent and 49,4 percent respectively due to inadequate working capital and the effect of operation streamlining efforts adopted in order to curtail losses in the poultry division.
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