CFI Holdings Ltd Saw Lower Sales in FCC Division due to Exchange Rates and Consumer Spending, While Milling Operations had Higher Sales.

Published On: January 9, 2024Company: CFI Holdings Limited (CFI.zw)
What are some of the challenges that CFI Holdings Limited faced during the reporting period?
CFI Holdings Limited faced a challenging economic environment characterized by hyperinflation and unstable exchange rates, which significantly affected its recorded revenues and profits. Exchange rate disparities and blended inflation figures also presented challenges. The Group also saw declining consumer spending power and a significant increase in the loss before tax.

Summary

  • In a challenging economic environment characterized by hyperinflation, unstable exchange rates, and intermittent power outages, CFI Holdings Limited faced significant performance translation challenges for both historical and inflation-adjusted accounts.
  • Year-on-year inflation declined from 56.1% to 18.4% over the reporting period, but exchange rate disparities and blended inflation figures affected recorded revenues and profit for the period.
  • Increased costs of inputs and reduced producer prices resulted in declining consumer spending power, despite the Group’s increased revenues of 245.7%.
  • Challenges with exchange rates and inflation, as well as reduced consumer spending, led to a loss before tax of ZWL125.23 billion, up significantly from a loss of ZWL3.06 billion the previous year.
  • Despite these challenges, the Group invested significantly in property, plant and equipment.
  • Various divisions within the Group faced their own challenges. For instance, the FCC division experienced a decrease in sales volumes due to unstable exchange rates, high interest rates, and reduced consumer spending, while the milling operations division saw increased sales volumes due to improved raw material availability.
  • The Group also continues to focus on sustainable business practices, striving to align its business strategies and values with the Global Reporting Initiatives (GRI)’s Sustainability Reporting Guidelines.
  • In the future, the Group will prioritize continued investments in its milling operations for long-term competitiveness and will maintain a focus on low-cost housing delivery in support of the Government’s Vision 2030 development goals. The Group also plans to continuously strengthen its human capital base and improve its business models and operational systems.

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About CFI Holdings Limited (CFI.zw)

CFI Holdings Limited is a leading agricultural-based industrial holding company in Zimbabwe; primarily involved in manufacturing and selling fresh produce and manufacturing stock feed, aswell as property management and letting. Through subsidiaries and joint ventures; it manages wholesale and retail outlets, offers products and services for animal health, operates maize and wheat mills, and is involved in poultry farming and producing and selling poultry products. CFI Holdings Limited manages a separate entity offering services for the development and management of real estate in Zimbabwe. STALAP Investments is now the largest shareholder in CFI Holdings Limited after increasing its stake in the company to over 40%. STALAP is an investment vehicle owned by Zimre Holdings. Its retail outlets include Farm & City and Vetco Animal Health; its specialised divisions include Victoria Foods, Saturday Retreat Estate, Reston Developers and Maitlands Zimbabwe Limited. Poultry is marketed and distributed through Agrifoods, Agrimix, Hubbard Zimbabwe, Glenara Estates, Crest Breeders International and Suncrest Chickens. CFI Holdings Limited is listed on the Zimbabwe Stock Exchange

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