CFI posts US$6 million loss

back of improvements in capacity utilisation in some of the diversified group’s operations.
The poultry division contributed 48 percent, specialised 24 percent and the retail division recorded 28 percent. But the volume growth could not offset slackened margins and overheads. The group posted a US$65 000 profit in 2010.
Operating loss before taxation and depreciation from continuing operations stood at US$1,1 million, but the loss position increased to US$5,54 million after interest, taxation and depreciation.
CFI chairman Mr Simplisius Chihambakwe said 2011 was a challenging year. The group failed to complete recapitalisation while old infrastructure and high finance costs hampered group performance.
“While efforts to grow revenues were reasonably successful, group performance was hampered by ageing infrastructure in poultry, overall 3 percent decline in margins and increase in finance costs,” he said.
In the poultry division, Agrifoods recorded a 39 percent growth in volumes to 79 998 tonnes compared with the prior year. Poultry feeds were most dominant due to their viability and popularity with all farmers.
Agrimix registered growth in volumes and profitability driven by an increase in demand as well as growth in market share. Growth in poultry, beef, dairy and poultry and pig industries spurs the premix industry.
Hubbard Zimbabwe sold 11 million chicks from 8,5 million chicks in the comparative period last year despite growing competition in the day-old chicks sector during the course of the year. Hubbard operated to optimal capacity in the period and managed to maintain its market shares.
Glenara Estates continued to produce hatchings for Hubbard Zimbabwe and broiler chickens for Suncrest Abattoir. The operation also produced winter wheat, seed maize, commercial maize and soyabean. Excess production had to be sold directly to other hatcheries in the country.
CFI said Crest Breeders was turned into a “solely table egg production” facility after broiler production was terminated in the first half of the year due to water shortages and ageing infrastructure. Commercial egg production capacity rose to 60 percent from 33 percent.
At Suncrest Chickens production increased by 10 percent, but the operation’s profitability was hampered by the ageing plant and high input costs driven by escalating soya and maize prices. Margins were under pressure all year round due to illegal imports of dressed chickens.
A total of US$1 million was invested in modernising Suncrest’s equipment and this is expected to have favourable impact on the entity’s operations.
Vetco performed well on the back of competitively priced imported products, which have proved popular in the market. The recapitalisation programme the firm has embarked on will impact positively on profitability. This includes seeking fresh investors to take up shareholding in Victoria Foods and Crest Poultry.
CFI also revealed that it was also working on recapitalisation at group level and the capital raising initiative will combine a mix of equity and appropriately priced medium- to long-term debt.