CABLE manufacturer, Cafca Limited, experienced a drop in export volumes by about 22% to 83 tonnes in its third quarter ended June 30, 2024 due to challenges in getting foreign currency for restocking.
This comes as the market has been dealing with a severe liquidity crunch caused by hawkish monetary and fiscal policies meant to control money supply growth as part of measures to support the new currency, Zimbabwe Gold (ZiG).
In a trading update for the third quarter ended June 30, 2024, Cafca said export volumes had dropped from 106 tonnes from the same period last year.
“Export volumes were 83 tonnes in the current quarter versus 106 tonnes in the same quarter last year. These export volumes were slowed down by difficulties experienced by customers in Malawi and Mozambique, obtaining foreign currency for stock replenishment,” Cafca said.
“In addition, the Tanzanian market experienced more competition during the quarter, resulting in lower than last year’s export volumes.”
The company, however, said local volumes for the quarter were 21% up compared to the same quarter last year on the back of an 80% increase in aluminium volumes.
“The third quarter trading environment has been stable owing to the ZiG introduction and increased transactional use of the United States dollar,” Cafca said.
“However, foreign currency access via the willing-seller willing-buyer market has remained challenging. The impact of the drought, the decline in commodity prices and inadequate power generational performance will continue to moderate infrastructure development in the period ahead.”
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Conductor tonnes sold during the period under review were 753, up from the 659 registered over the 2023 comparative.
For the nine months ended June 30, 2024, conductor tonnes sold were 2 004 compared to the 1 979 tonnes from the previous year.
Resultantly, turnover for the quarter under review was ZiG154 million, compared to ZWL37,4 billion (ZiG14,96 million) in the comparative 2023 period.
Profit before taxation for the quarter was ZiG78 million from a 2023 comparative of ZWL18,1 billion (ZiG7,24 million).
Turnover for the nine months ended June 30, 2024 was ZiG238,7 million, compared to the 2023 comparative of ZWL53,1 billion (ZiG21,24 million).
Profit before tax for the nine-month period was ZiG122,2 million versus ZWL24,7 billion recorded in the prior year.
In May, Cafca said volumes were projected to surpass last year’s for its current full financial year ended September 30, 2024.
“Demand for cables 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,” Cafca said.
