adminLISTED cable maker Cafca says turnover for the March reporting period will be down 20 percent reflective of the slowdown in economic activity but profits will be up 30 percent.
Managing director Mr Rob Webster told the annual general meeting yesterday that Cafca was no different to any other company in terms of where the economy finds itself and turnover will be down as a result.
Profits will, however, rise by a significant 30 percent as the group was benefiting from a barter deal with ZESA for the last six months.
Under the deal Cafca replaces Zesa copper cables with aluminium and then recycles the copper for use at its plant.
“This is means at the moment we are relying solely on recycled copper and this had cut out import bill.
“In fact we do not import at the moment.”
The deal still has a good 18 months to run. “After that we will import from Zambia again.”
Mr Webster said because of this, the group is selling more of the low yielding aluminium than the high paying copper cables. Copper sells at US$8 000 per tonne against aluminium at US$3 000 per tonne. Operating capacity was at 140 tonnes per month against an installed 250 tonnes. On exports, Webster said the group was pushing though at low margins.
“Exports still remain an issue accounting for 15 percent of turnover.”
He said the group’s cost cutting initiatives had continued but were below last year.
Mr Webster said the group had eliminated all borrowings last week and therefore expects no finance charges going forward. – FinX.
Online Reporter