CFI Holdings Limited volumes jumped 80 percent in the year to September 30, 2021 largely driven by improved aggregate demand following a good 2020/21 summer cropping season. The diversified agriculture focussed company said the improved volume performance was witnessed across most of its key product lines or segments.
Retail operations dominated the revenue mix contribution recording 91,4 percent whilst farming operations accounted for 3,7 percent of inflows from 3,1 percent in the prior year.
CFI subsidiary, Victoria Foods’ exit from judicial management was instrumental to the growth in the group’s revenue after the division’s milling operations contributed 4,9 percent to the turnover.
Resultantly, the agro-focused group’s historical revenue for the year increased by 308 percent to $7,83 billion, significantly higher than the $1,92 billion it managed the previous year.
CFI Holdings board chairperson Itai Pasi said the relaxed lockdown environment experienced in 2021 led to better trading conditions (improved trading hours) thus promoting volume uptake.
“The economic environment continued to be restrained by the impact of the Covid-19 pandemic as the country traded under varying degrees of lockdowns throughout the year. Fortunately, for the greater part of the year, the group’s businesses operated under normal trading conditions. The economic improvements registered at the beginning of the year, characterised by relatively stable exchange rates and declining inflation,” said Ms Pasi.
She however, bemoaned the late distribution of auction funds, which she said led to reduced confidence by the businesses, as this also drove widening of the gap between the official and open market exchange rates.
“The increasing backlog in the disbursement of foreign currency allocated on the auction market resulted in market confidence declining, and the widening of the gap between the auction market exchange rate and the alternative market rates,” she said.
CFI said it could not ascertain the exact impact of Covid-19, but noted the pandemic had not shaken the business, which remained in solid condition for the foreseeable future.
“It is difficult to assess, with absolute certainty, the full impact the pandemic will have on the group’s financial performance for the forthcoming financial period on the Business Continuity and Statement of Solvency.
In terms of the financial status, the group said it remained healthy, adding Covid-19 pandemic had not created any issues from a solvency or liquidity perspective, Ms Pasi said.
CFI Holdings said it invested $107 million in capital expenditure during the period under review for the different Strategic Business Units (SBUs) compared to $34,1million in 2020.
According to CFI, the expenditure covered renovations of several Farm and City Centre shops as well as piggery, poultry, and irrigation infrastructure at Glenara Estates.
Going forward the group said it would prioritise the development of low-cost housing delivery in Harare South in support of the Government’s Vision 2030 on housing.