Padenga defers dividend to contain borrowings

PADENGA Holdings did not declare a dividend in the 2021 financial year as the Victoria Falls Stock Exchange listed crocodile skins and gold producer chose to retain the funds to contain its borrowings, the company said in its 2021 financial statement.

The firm said interest expenses increased by 49,93 percent to US$ 10 million last year. This was due to increased borrowings for the rehabilitation of the Eureka Gold Mine, which helped to drive revenues growth in 2021.

In the short to immediate term, the company said it resolved to focus on reducing borrowings to address the issue of high interest charges.

The company invested US$ 20 million last year into its gold mining operation, which gave it control of two gold mining units which after rehabilitation and expansion are both poised to contribute significantly to the Group’s revenue and profits.

“The Eureka Gold Mine, which was commissioned during the last quarter of 2021 will contribute significantly to volume growth, having commenced production in the second half of last year. At Pickstone Peerless Mine, revised production methods are being implemented to fully restore the operation to profitability.

“Gold volumes for the Dallaglio Group are therefore anticipated to increase 25 percent during 2022 with a concomitant 20 percent reduction in the all-in sustaining costs per ounce produced. This will increase margins and enhance profitability.”

The group generated cash amounting to US$ 15,5 million from operating activities for the year up from

US$ 6,6 million the prior year. The increase in cash inflow was achieved on the back of increased efficiencies in working capital management

During the period under review, the firm’s revenue totalled US$ 78,47 million, which was a 10 percent increase over the US$ 71, 6 million recorded in the prior year.

Mining division Dallaglio Investments led the revenue contributions to the group, at 66 percent from 57 percent 2020, largely driven by increased production and firming international prices.

The Zimbabwe crocodile operations contributed 31 percent of revenue total, from 38 percent in the

Gold volumes at the Dallaglio Group are projected to increase by 25 percent in 2022 same period in 2020. of global supply chains are expected to support the

The Texas alligator operation’s, US, contribution rebound in business activity. was down to 3 percent from 5 percent in 2020 as The entity has already made advances into penedepressed consumer spending dominated the trating the Asian market and could result in further period due to lockdowns from Covid-19 threats. profit generation.

Growing stockpiles of crocodile skins were marked Market watchers believe the skins business has down due to lack of demand for their size and quality upward potential as it grows in line with the broader in the international luxury market. luxury goods market.

“The alligator skins market remains depressed and Whilst the quality of skins Padenga produced in oversupplied. Given the current volume of unsold 2021 improved significantly, low demand and low stock skins of this species in the market and that of sales volumes resulted in below par financials in live alligators on farms, we anticipate this situation this unit. to persist for a minimum of four to five years,” the “The solid Group revenue performance was largely company said. driven by the exceptional contribution from the min

Moving forward, as pandemic effects become less ing operations. This followed the on-time commispronounced and the global economy moderates sioning of the new Eureka Gold Mine in Guruve in positively, the company said it anticipated improved October 2021. The Eureka Gold Mine achieved its performance of the crocodile division. plant nameplate capacity seven weeks earlier than

Recovering disposable incomes and the opening forecast on November 25, 2021” the group said.