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Michael Tome Business Reporter
Zimbabwe Stock Exchange (ZSE) listed agro-focussed firm, CFI Holdings, says the recapitalisation of its subsidiary, Victoria Foods, has started paying dividends after the company posted a 135 percent growth in flour sales volumes in the third quarter to June 2022.
Victoria Foods resumed production of its leading household brands this year following exit from judicial management last year September, where it was placed in 2016.
Earlier, the diversified agro concern announced that it required circa US$6 million for recapitalisation of Victoria Foods.
The improvement in the division’s performance was also attributed to raw materials availability during the quarter under review.
However, CFI said sales volumes for the retail division, a central revenue driver for the group, trailed that of the comparable quarter in the same period last year, driven by the late onset of the 2021/22 rainy season as lower harvest inhibited demand for agricultural inputs.
“Demand for fertilisers, which traditionally peak during the tobacco marketing season, was also constrained by the significant real price increases for the commodity. Cement sales for the quarter were also adversely affected by supply constraints, “said CFI secretary Panganayi Hare in a statement accompanying the group’s third quarter performance.
In the quarter under review, revenue grew by 21, 8 percent in inflation-adjusted terms to $6,54 billion from $5, 34 billion in the prior-year quarter.
The retail division contributed 70,85 percent to total income a dip from 87, 37 percent in the comparable quarter in 2021 while the milling segment accounted for 25,79 percent, a notable growth from 7,91 percent reported in 2021.
In terms of the group’s farming operations at Glenara Estates, the group realised a harvest of 1 770 tonnes of maize, 729 tonnes of potatoes, and 621 tonnes of soya beans, maintaining yields relative to the prior year.
Overall returns from farming operations declined to 3,36 percent from 4,72 percent.
The diversified agro concern however, indicated that growing local and global inflation presented challenges to business viability coupled with exchange rate disparities in the local market and expects the position to characterise the trading environment in the short term.
“This is expected to depress disposable income and spending to year-end, save for mining and construction sectors of the economy, where improvements are expected,” said Mr Hare.
However, CFI said thriving mining and construction industries were likely to anchor the company’s retail performance from now on as waning spending ability by individual consumers sustains.
CFI Holdings operations include Victoria Foods, Farm and City, Glenara Estates, Langford Estates, Suncrest, Agrifoods, and Crest Poultry.
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