CFI Holdings to rely on imports
ZIMBABWE Stock Exchange-listed agriculture-based industrial holding company, CFI Holdings Limited will rely on imports of maize and soya for the next half year due to the erratic rains received during the 2021/22 agricultural season.
In a financial report for the year ended September 30, 2022, CFI chairperson Itai Pasi said rain unreliability during last year’s agricultural season reduced the demand for agro-inputs.
“Over and above the erratic rains, the country experienced a midseason drought, resulting in a significant decline in local agricultural output,” Pasi said.
One of the company’s subsidiaries, Farm & City, faced challenges during the period under review because of high domestic and imported inflation, multiple exchange rates and reduced agricultural output, which decreased key revenue driver volumes by 21% compared to prior year.
Despite these challenges, Farm & City managed to open a Builders City branch and refurbished the Sanyati and Chitungwiza branches to increase the trading space and bring convenience to customers.
CFI’s farm, Glenara Estates, saw reduced maize and soyabean planting because of the late onset of rains which led to output dropping 13%.
Potato harvest increased 10%, while yields improved by 7% compared to prior year.
“The estate invested in additional irrigation infrastructure in order to underpin horticultural production going into the future. In addition, cattle pen fattening and breeding operations were maintained with reasonable success,” Pasi revealed.
CFI posted an increase of 39,4% in inflationadjusted revenues for the year from $35,38 billion to $49,37 billion.
“The increase is mainly attributable to improved sales volumes from Victoria Foods underpinned by continued recapitalisation. However, aggregate demand for retail products decreased in comparison to FY2021 following a below normal 2021/22 agricultural season. Overall, retail operations contributed 80,0% (2021 — 91,9%), milling operations (Victoria Foods) contributed 17,4% (2021 — 4,3%) and farming operations accounted for 2,6% (2021 — 3,6%) of the group turnover,” she said.
The group incurred unrealised exchange losses of $6,1 billion on its foreign currency-denominated loans and as a result, it posted a loss before tax of $2,59 billion against a loss of $0,75 billion for prior year.
“The group incurred a $0,77 billion inflationadjusted operational loss (inclusive of monetary gains) before depreciation, impairment and financing costs compared to an operational profit of $0,4 billion in the prior year,” Pasi said.
The group also invested $548,19 million (2021 — $540,6 million) in capital expenditure for the different strategic business units mainly covering IT infrastructure for its various subsidiaries.