HARARE – Agro-industrial conglomerate CFI Holdings (CFI) has remained in the red despite reducing its loss to $3,3 million in the six months to March 2016 against a loss of $3,7 million loss recorded in the same period last year.
The group’s acting chairperson, Grace Muradzikwa, yesterday said CFI’s operations were significantly affected by inadequate working capital, declining aggregate demand induced by the overall decline in the economy and the effects of a poor 2015/6 agricultural season.
“With the resolution of the $16 million local debt overhang burden, the board is focused on strengthening its capital base to stabilise the group,” she said adding that the inflows from compensation for Saturday Retreat and the Maitlands Zimbabwe land have begun accruing and were being applied towards the company’s working capital requirements.
“The group also secured firm interest for purchase of its residual 19 percent stake in Langford Estates valued at $4,3 million, 10 percent stake in Beira Grain Terminal and some land banks for $1,9 million, all of which will assist in resolving various funding commitments confronting the group,” she added.
Muradzikwa noted that CFI still has 320 hectares of undeveloped land in Harare South and was pursuing disposal of this land in order to capacitate the various group operations that are in need of capital.
This comes as the listed firm, whose revenue also declined to $19 million from $34,3 million, on the back of overall low capacity utilisation, subdued margins and streamlining costs incurred in the second quarter, recently instituted management changes to drive growth.
In the period under review, CFI’s turnover slumped 44,2 percent to $19,1 million compared to $34,2 million achieved in the same period in prior year.
“Revenue declined by 63,6 percent, 50,3 percent and 33,8 percent for the poultry, specialised and retail divisions respectively due to the combined effect of a slowdown in overall consumer demand and inadequate working capital during the period,” Muradzikwa said.
The group posted an operating loss before depreciation and financing costs (Ebitda) of $4,6 million against $1,9 million in prior year.
“Financing costs for the period decreased to $700 000 against $2,1 million incurred in the comparable period resulting in a loss after tax for the half-year of $6,1 million against $3,8 million posted in prior period,” she said.
Total borrowings were reduced to $4,1 million from $19 million as a result of the $16 million debt assumed by Fidelity Life Assurance effective October 17, 2015 in the Langford transaction last year.