HomeBusiness DigestCafca braces for loss

Cafca braces for loss

Staff Writer

LEADING cable manufacturer, Cafca Ltd, says it is preparing itself for a possible loss due to the country’s current hostile operating environment.

FONT face=”Verdana, Arial, Helvetica, sans-serif”>Cafca company secretary Austin Zvidzai said the operating environment had been hostile to its export and domestic earnings. He said the continued high inflation rates and depressed demand for the company’s products had provided a challenge to operations.

“Trading in the first months has not been easy as we are operating in an environment still characterised by hyperinflation on the back of severe depressed domestic demand for our product,” said Zvidzai.

He said Cafca had informed shareholders about its earnings in relation to the new export proceed requirements as set by the Reserve Bank of Zimbabwe’s monetary policy statement.

He said the company needed to restructure and implement various cost-cutting measures to ensure viability.

Zvidzai said various measures introduced by the company were however beginning to bear fruit.

“Your directors have since embarked on the restructuring of the company. Various cost-cutting measures implemented at the beginning of the year have also begun to bear fruit,” Zvidzai said. He however said the company’s results had been adversely affected and thus were below analysts’ forecasts.

“Inspite of the cost-cutting actions taken, the unaudited results for the six months ending 30 June due to be published shortly have been adversely affected and will be well below analysts’ forecast,” said Zvidzai.

In the new monetary policy statement exporters retain 50% of their foreign currency earnings for operational requirements but surrender 25% for sale at the prevailing auction rate.

The remaining 25% goes to the central bank.

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