ZAMEFA RECORDS LOSS

...indicated that the adverse impact of the Covid-19 pandemic during the balance of the year on the demand in the Group’s export markets and the associated logistics further contributed to the higher loss per share.

METAL Fabricators Zambia PLC (ZAMEFA) reported a loss per share for the financial year ended September 2020, which are 228 percent higher than the prior year. The company loss per share was 227 percent higher than the previous year, according to the financial results for the year ended September 2020 posted on the Lusaka Securities Exchange (LuSE). ZAMEFA indicated that the increased losses are primarily due to the substantial weakening of the Kwacha, against the United States dollar (USD), of 53 percent since the Group and Company’s previous financial year-end and the corresponding re-measurement of the Group’s USD based liabilities. It indicated that the Group’s vulnerability to the volatility of the Kwacha to the dollar was a direct result of overdue Value Added Tax (VAT) and duty draw back refunds. This is from the Zambia Revenue Authority (ZRA), which required the Group to finance its operations through the utilisation of dollar-based funding. “A significant portion of the overdue amounts due by the ZRA were collected towards the end of the financial year reducing the balance outstanding at the end of the year to K96 million from K250 million and reducing the Group’s net dollar exposure,” it stated. In addition to the negative impact of the exchange rate volatility, the Group’s revenue, and gross profit in the first four months of the year were negatively impacted by the unavailability of copper cathode in Zambia. ZAMEFA indicated that the adverse impact of the Covid-19 pandemic during the balance of the year on the demand in the Group’s export markets and the associated logistics further contributed to the higher loss per share.The finance costs decreased by 8.77 per cent compared to the prior year due to the restruc-turing of the long-term loan from the majority shareholder into an equity loan bearing in-terest at zero per cent. It stated that the restructuring was concluded during the last quarter of the financial year. “The net equity of the Group has been positively impacted by the restructuring of the long-term loan from the majority shareholder into an equity loan.“This has resulted in the Group’s net equity increasing to K131 million and the Company’s net equity increasing to K136 million restoring the Group and Company to a technically sol-vent position at year end,” the company stated.