CFI posts 16.2% profit before tax
By Ruvimbo Chatyoka
CFI Holdings Limited has posted a 16.2% increase in profit before tax for the year ended 31 December 2020 to ZW$392.2 million from 337.4 in the prior year spurred by a positive 30.1% increase in revenue income.
Revenue income rose to ZW$3.4 billion from ZWL2.6 billion driven by the twin effect of Crest Poultry Group’s (CPG) performance and an increase in sales volume in the last quarter of the year.
CFI chairperson, Itai Valerie Pasi said, “Revenue increase was driven by the effect of consolidating CPG revenues after it came out of judicial management at the beginning of the year and an increase in sales volumes in the last quarter of the year, while retail operations contributed 99.0% whilst farming operations contributed 1.0% of the total turnover.”
Furthermore, the group operating profit increased by 10.8% attributed to cost containment efforts sustained during the period, increased procurement efficiencies and the positive contribution from CPG’s performance.
However, the trading environment was marked by operational and economic challenges.
In particular, hyperinflation, an unstable exchange rate and limited availability of foreign currency in the formal banking channels for the greater part of the year.
This was exacerbated by drought-induced shortages of cereals used in the stock feeds manufacturing processes and in the last half of the year, the COVID-19 pandemic.
The prevalence of multiple exchange rates distorted operating costs and product pricing. The inflationary environment and drought generally impacted negatively on consumer disposable incomes, thereby reducing discretionary household spending.
Meanwhile, the group continues to pursue the exit of Victoria Foods from judicial management and will give an update in due course. The return of this company to the Group’s control after more than four years under judicial management will mark an important milestone in the group’s turnaround efforts and its resurgence as a significant pillar in underpinning food security in the economy.
CFI Limited is a leading agricultural-based industrial holding company in Zimbabwe primarily involved in manufacturing and selling fresh produce and stock feed as well as property management.