HomeBusiness DigestCairns sales volumes set to increase 5%

Cairns sales volumes set to increase 5%

Shakeman Mugari

CAIRNS Holdings chief executive officer Philip Chigumira says overall sales volumes in the group divisions are likely to increase about 5% in the current quarter.

In an interview Chigumira said volumes in the last two months had recovered from the bad spell reflected in the last reporting season for the period ended August 31.

“The first two months of this quarter has seen a market recovery in volume terms for all divisions except paprika. We are forecasting that all divisions will grow by about 5%,” said Chigumira.

The paprika business unit, which was constrained by fire damage, will start operating at full capacity and is likely to have an impact in the next set of results.

The group said the paprika division had a full order book.

“We are starting operating at full capacity next week and the volumes in that division are likely to be firm buoyed by the demand in the market,” Chigumira said.

He said the recovery of the paprika division was likely to enhance export volumes, which had been disappointing.

For the period to August 31 export volumes accounted for 8% of group turnover, which management said was disappointing compared to the same period last year.

Volumes in the period to August slumped an average 9% in M.E Charhons and other divisions owing to the shortages of wheat, maize and recently cash.

Canning and winery however, recorded firm volumes compared to the same period last year.

“The grocery and snack division had been hit by the cash shortage. Now we are expecting the situation to slightly change because of the improvement in the cash crisis,” said Charhons.

Chigumira said the company had witnessed an improved raw material supply on the back of an aggressive out grower’s scheme, which had insured a constant supply of potatoes and beans to the company.

On the regional market Chigumira said the company had made inroads into East Africa.

The company is already in South Africa, Malawi and Namibia.

In the last set of results Cairns Holdings recorded a turnover of $30,7 billion compared with $5,5 billion achieved during the same period last year.

Earnings per share were ahead of market expectations at $57,02 ahead of last year’s $7,90.

The results were also in line with market expectations that anticipated average earnings per share of $54.

The businessdigest had gathered a range of between $49 and $56 per share.

On the future prospects Chigumira said the performance of the company largely depends on the fundamentals in the economy.

“A better exchange rate and the slow down of the runaway inflation will help the company. If the situation gets back to normal then we are willing to perform well,” said Chigumira who added the company would still manage to perform in line with expectations.

He said the company continued to move ahead despite the country’s difficult macro-economic environment caused by hyperinflation.

Most products have had to have their prices hiked due to soaring inputs costs.

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