CABLE manufacturer, Cafca Limited (Cafca) recorded a massive 243% growth in liquidity owing to a 72,1% reduction in current liabilities for its half year ended March 31, 2024.
The company reported a ZWL$12,23 to every dollar of short-term debt, compared ZWL$3,57 to every dollar of short-term debt reported at the end of its full year performance ended September 30, 2023, Cafca reported.
The reduction in current liabilities was on the back of Cafca reducing its dividend payable, bank overdraft, trade and other payables and provisions for other liabilities and charges.
Provisions for other liabilities and charges, represent funds set aside by a company to cover anticipated losses in the future, indicating that Cafca was confident in avoiding such an outcome.
“The company continued to hedge against inflation by having adequate stocking of finished goods. Accounts receivable of ZWL$86 billion mainly relate to export and local mining customers. Trade and other payables of US$20 billion relate to local suppliers,” Cafca said, in a statement attached to its half year financial report ended March 31, 2024, released last week.
“Borrowings of ZWL$15 billion were utilised to fund working capital. Demand for cable remains firm and the Company remains optimistic in achieving budgeted sales volumes. The newly-introduced Zimbabwe Gold currency is expected to bring more stability in the economy.”
During the period under review, the cable manufacturer reported that sales volumes for the half year were 10% above last year comparative for both domestic and export volumes.
“Most domestic sectors had a steady growth,” Cafca said.
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“Turnover in inflation adjusted numbers was ZWL$686 billion against ZWL$483 billion of last year and this was 42% increase while in historical cost terms turnover was ZWL$212,9 billion versus ZWL$15,7 billion showing a growth of 1 256%.”
Growth in turnover led the firm to post a profit after tax of ZWL$145,51 billion during the period under review, an increase from ZWL$116,87 billion as of March 31, 2023.
Cafca said operating profit in inflation adjusted figures was 16% above last period which was less than turnover increase.
“The shift towards aluminium from copper in terms of sales mix resulted in lower profitability. Inflation accelerated in the period January 2024 to March 2024,” Cafca said.
“The ZWL$ weakened by 2 562% between the period January 2024 to March 2024 on the official market.”
However, Cafca recorded a reduction in total assets of nearly 5% to ZWL$911,5 billion during the period under review from September 30, 2023.
The reduction was due to a drop in trade and other receivables, monies owed to the business, to ZWL$95,2 billion as at the end of the period under review from ZWL$226,79 billion as of September 30, 2023.
