CFI management has indicated its focus will remain on strengthening the group
Agro-industrial group, CFI Holdings Limited says prevailing inflationary pressures on the economy have had a knock-on effect on its first quarter performance, as sales volumes went down on waning disposable incomes.
According to CFI’s trading update for the first quarter to December 31, 2019, sales volumes fell 17 percent compared to the same period in the prior year due to low consumer spending as the environment remained challenging.
Volume performance across the group’s key segments also show consumer down trading to more affordable products as they seek value for money.
“For the first quarter ended 31 December 2019, the macroeconomic environment continued to be operationally challenging.
“This was characterised by subdued consumer demand as a result of prolonged power outages, the continued depreciation of the Zimbabwe dollar, a re-emergence of hyperinflation, the subsequent erosion of disposable incomes and high unemployment rates,” said CFI in a trading update for the quarter under review.
The group was also affected by erratic power supplies that have had a knock on effect on industry performance.
Poor electricity supplies have been cited as one of the major challenges affecting the economy and reducing capacity utilisation, as production time is lost.
CFI has, however, come up with mitigatory measures to deal with the power supply challenges.
Said CFI: “In order to mitigate the effect of the energy crisis, FCC continues to deploy solar equipment and hybrid batteries across its retail network to mitigate the challenge.”
For the agro-industrial firm, management has indicated its focus will remain on strengthening the group’s capital structure.
In line with this, Crest Poultry exited judicial management on January 31, 2020 and more focus is also being paid on Victoria Foods to ensure it also exits judicial management before the financial year ending 30 September 2020.
Already, Victoria Foods resumed mealie-meal production in Gweru during the quarter and is assisting in enhancing food security in the central and southern parts of the country.
During the period under review, Farm and City extended its operations by opening two branches, one in Harare and the second one in Bulawayo as it expands its footprint.
Glenara cropped 450 hectares of maize and 250 hectares of soya beans during the season, up from 450 hectares in prior year.
Management has indicated its focus remains consolidating recovery efforts while preserving shareholders’ capital amidst rising cost-push inflationary pressures and continued pricing distortions will be continued.
Meanwhile, CFI remains suspended from trading on the Zimbabwe Stock Exchange (ZSE).
Its shares were suspended from trading on January 2, 2018.
