Padenga Holdings Limited (PHL.zw) 2018 Annual Report

We have extracted below the Chairman’s Statement from the 2018 annual report of Padenga Holdings Limited (PHL.zw), listed on the Zimbabwe Stock Exchange:

Financial

Consolidated Results

The Group, produced satisfactory results given the rising local input costs due to inflation. This was however, mitigated by a tightening skin market and an increased demand for quality with a consequent impact on skin prices achieved in the period.

The Group recorded an operating profit before depreciation, amortization, impairment and fair valuation adjustments of US$18,117,493 (US$13,944,006 – FY17) from revenue of US$42,479,689 in the twelve months to December 2018. Revenue for the prior period to December 2017 was US$30,276,051. Profit before tax increased by 9% over prior year to US$17,775,551 (US$16,368,831 – FY17). Cash generated from operations amounted to US$15,815,623. Of this amount, a total of US$5,253,399 was used for capital expenditure, being mainly invested into additional new crocodile grower pens to further reduce stocking densities at strategic periods in the growth cycle as well as a solar farm to reduce recurrent energy costs and minimize the Company’s carbon footprint.

Crocodile Operation

The Zimbabwe crocodile operation continued to be the Group’s dominant contributor to both revenue and profitability. The operation, in accounting for 92% of the Group’s revenue, produced a satisfactory set of financial results. Turnover increased by 38% to US$39,228,344 from US$28,515,119 recorded in the prior period. Volumes were up by 2%. We sold 44,253 skins in FY18, up from 43,313 sold in the previous period. We closed the year with an additional 1,679 skins in stock which were graded and sold subsequent to year-end. Included in turnover is revenue from loc