CFI Holdings posts US$4m loss

But the recent breeding capacity expansion and improved efficiency at Victoria Foods is expected to turn around the company’s fortunes.
Through its division, Crest Poultry Group, the Zim­babwe Stock Exchange-listed conglomerate invested US$2,6 million in the project from loans obtained from the PTA Bank, the Government’s Distressed and Marginalised Areas Fund and Afreximbank.
The company can now breed 620 000 broilers at any given time from about 460 000 birds.

CFI also invested US$1,7 million in Victoria Foods. The money was obtained from the PTA Bank.
This has resulted in margins enhancement and improved efficiencies, with the impact expected to be felt next year.
“The group is excited about the favourable impact the PTA-funded projects have had in uplifting operational efficiencies at Victoria Foods and in the poultry division,” group chairman Mr Simplicius Chihambakwe said in a statement accompanying its financials.

The poultry division, in particular, has re-engineered its business plan to streamline its operations and resource, human and capital alike.”
The plan envisages the construction of a new abattoir at Glenara Estates at an estimated cost of US$8 million. The abattoir will be built next to the recently commis­sioned environmentally-controlled houses “so as to achieve critical mass for the business and buttress the poultry value addition chain integration”.

Already, CFI has indicated its intention to build addi­tional environmentally-controlled houses.
“The division is evaluating funding and capital restruc­turing options,” said Mr Chihambakwe.
Victoria Foods started trading profitably post-year end following a favourable Government policy shift on excise duties on wheat and a toll milling arrangement with the

Grain Marketing Board and “this should assist in attract­ing investors”.
Volumes at Agrifoods increased by 5 percent to 75 431 tonnes from 71 998 tonnes. Margins declined slightly but the business was generally profitable.
During the period under review, two additional depots were opened in Bindura and Zvishavane.

Agrimix recorded 25 percent growth in volumes and continued to trade profitability.
The growth was spurred by improved availability of soya meal, extensive marketing and a growing poultry industry. Chillers and hatchers at Hubbard Zimbabwe were installed in February, resulting in improved effi­ciency and chick quality.

At Farm & City, turnover grew by 20 percent, spurred by growing demand for agro inputs.
Overall, the group recorded a 6 percent drop in rev­enue to US$92,4 million, attributed to the 52 percent drop in Victoria Foods turnover on reduced floor uptake.
Revenue slowed in the second half of the year due to inadequate working capital.

Poultry, retail and specialised divisions contributed 52 percent, 36 percent and 12 percent to group revenue, respectively. Margins remained under pressure and gross profit margins shrunk to 20 percent. The group recorded loss before-tax from continuing operations of US$6,9 million compared to US$5,5 million last year.

A loss of US$40,450 was incurred after the disposal of the group’s 70 percent shareholding in Dore & Pitt to its management.
Finance costs increased to US$3,4 million from US$2,8 million in the previous comparable period. Mr Chiham­bakwe said the group’s priority is still on recapitalisa­tion, with about US$20 million required.