Ashly DhaniOliver Kazunga
DIVERSIFIED crocodile breeder, Padenga Holdings Limited, recorded a 52 percent spike in skin sales to 18 709 in the first half ended June 30, 2023.
The company, in an interim financial statement for the period under review, said this was an indication that their strategies adopted in the past two years, to improve the quality of the product are beginning to bear fruit.
In the corresponding period last year, Padenga sold 12 321 skins locally and outside the country.
The Victoria Falls Stock Exchange-listed company, said during the period under review, its Nile crocodile operations recorded a 90 percent increase (21 280) in skin harvest volumes, benefiting from a harvest of 10 000 premium skins carried over last year.
During the same period last year skin harvest volumes were 11 217.
“Skin sales in the six months at 18 709 skins were 52 percent above the 12 321 skins sold for the same period last year. We have extended the production season to the end of February annually to incorporate the full summer period and this will contribute towards finishing skins to the increased quality standards demanded by the market.
“The sale of stock skins from prior years is continuing with the expectation that these will be fully disposed of by the end of the current financial year,” said Padenga.
Capital projects during the first half of the year were mainly focused on the annual rehabilitation of crocodile pens which is central to improvement of skin quality.
The 2023 rehabilitation programme was completed on schedule, said Padenga.
“The installation of the phase 3 solar array at the northern farms to bring the solar plant operating capacity to a total of 1,2MW has been concluded with commissioning works underway for completion by the end of October 2023.”
During the period under review, revenue for the crocodile business increased by 128 percent in comparison to the same period in 2022, on the back of the 10 000 skins sold from harvest carried over from last year and a 16 percent improvement in average realisation per skin.
“Global and domestic inflationary pressures continued to impact negatively, resulting in an 11 percent increase in operating costs compared to prior year. The significant devaluation of the Zimbabwean dollar during the second quarter of the year resulted in the operating unit incurring half year exchange losses of US$985 425 compared to exchange gains of US$1,84 million in prior year when the operating unit benefited from significant Zimbabwe dollar-denominated loans,” said Padenga.
The crocodile operation generated US$2,5 million in cash from operating activities during the period under review in comparison to US$2,2 million achieved in the first half of 2022, benefiting from the improved revenues.
Overall, the group posted a 31percent improvement in revenue to US$74,4 million in the six months to June 2023 underpinned by “significant” contributions from Eureka Gold Mine.
Through its mining division, where it owns entities such as Eureka Gold Mine, Dallaglio Investments and Pickstone Peerless, Padenga said its positive revenue performance was also coupled with the carry forward of crocodile skin sales from last year.
“The group recorded revenue of US$74,4 million for the six months under review. This was 31 percent over the US$56,9 million recorded in the prior period.
“The revenue performance for the group was largely due to the significant contributions from Eureka Gold Mine, coupled with the carry forward of skin sales from 2022,” it said.
In the period under review, Dallaglio’s contribution to revenue was 84 percent compared to 91 percent during the same period last year, and Nile crocodiles (16 percent) up from 9 percent in the corresponding period in 2022.
A reduction of 15 percent was recognised on net interest expense for the group at US$3,7 million compared to US$4,3 million in the corresponding period last year owing to restructuring of borrowings.
Profit before tax for the group was recorded at US$7,5 million for the six months compared to US$15,7 million posted in the first half last year.
“The group generated cash amounting to US$12,9 million against US$3,7 million in the same period last year from operating activities for the year. The increase in cash generated was mainly due to improved revenues and efficiencies,” said Padenga.
Meanwhile, Dallaglio has maintained its spot as one of Zimbabwe’s top three gold producers after delivering 1 080 kilogrammes of the yellow metal in the six months to June 2023. Last year, in the half year period to June, Dallaglio produced 933 kg.
Its profit before tax amounted to US$5,4 million in the period under review compared to US$12,9 million in the corresponding period last year.
“Dallaglio Investments maintained its spot as one of the top three gold producers in the country after registering gold sales of 1 080kg (933kg-H1 2022). The volume growth of 16 percent was largely driven by increased plant throughput at Eureka Mine,” it said.
The major capital project for the period under review was the refurbishment of the underground mine at Pickstone Peerless Mine in Chegutu with phase 1 of the project having been completed last month.
“The first phase of the project was completed in August 2023, and commercial production has started.
This is poised to contribute significantly to the group’s revenue and profits, going forward,” said Padenga.
In May this year, it was reported that the expansion of the mine’s shaft was on course with projections of hitting 80kg of gold per month on sight this year. Production levels at Pickstone are expected to reach close to 140kg by next year.
For the second year-running, Eureka continues to deliver robust performance, contributing significantly to volume growth and profitability.
“Various operations and cost optimisation initiatives are in progress to further consolidate this growth,” it said.
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