A US$1,3 million investment in stock helped cable manufacturer Cafca post a 29% increase in earnings as the company became better placed to reduce lead times and generally meet customers’ demand.
Report by Gamma Mudarikiri
In a statement attached to the Cafca’s financial results, company secretary, Caroline Kangara, said the investment was financed mainly from the company’s profits and borrowings.
Basic earnings per share improved 29% to US$5,13 compared to US$3,97.
The company’s total liabilities and equity in the period marginally increased to US$13,3 million compared to US$12,1 million in the nine months to September 2011.
The company said the reporting period was 12 months against a nine months comparative as the financial year end was changed to coincide with that of the majority shareholder, CBi Electric African Cables South Africa, for the purposes of consolidation.
Cafca is listed on the Zimbabwe, Johannesburg and London stock exchanges.
The company’s net borrowings position was US$688 000 of which US$600 000 was a once-off investment in aluminium raw materials to overcome a short-term market shortage.
The company, however, said it would maintain borrowings below the current level due to uncertainty in the economy.
“Due to uncertainty in the economic environment, we are forecasting to at least maintain current throughput for the next twelve months with the only downturn in demand being replaced with recycling copper barter deals”, said the company statement.
Turnover in the year surged 25% to US$23,1 million compared to US$18,3 million in the comparative period.
Operating profit increased 19% to US$2,3 million, which the company said reflected a stagnant and difficult market.
Finance costs during the year reduced to US$89 780, against US$170 776 in the previous year.
The decrease was attributed to reduced borrowings and cheaper borrowing costs.