CFI Holdings expecting a full year loss as restructuring continues
CFI Holdings is projecting a reduced loss at year end largely underpinned by restructuring and recapitalisation efforts scheduled for the last quarter of the financial period.
In an operational performance update for the eight months to May 31 2016, acting chief executive officer, Timothy Nyika, said group revenue declined by 45 percent to US$23,1 million compared to prior year turnover of US$41,8 million.
Margins were 1,1 percent below prior year due to the impact of reduced capacity utilisations in the poultry and mining divisions.
Nyika said on a positive note, the group financing costs went down to US$1,1 million compared to US$2,7 million same period last year.
The group’s bank borrowings declined to US$5,8 million from prior year level of US$19,1 million on the back of Debt Assumption and Compromise Agreement.
In October last year, the group concluded a debt compromise and settlement agreement with local banks who were owed a total of US$16 million.
In terms of operations, turnover for the poultry division declined 62 percent year on year as a result of the closure of loss making entities.
“The adverse impact of poultry activities will now not have a significant impact on the group’s performance going forward,” said Nyika, further noting that the group embarked on horticultural activities, mainly table and seed potato production on its Glenara farm and these have yielded exciting results that will enhance the Estate’s fortunes going forward.
Demand for stock-feeds remained firm during the period, but turnover for Agrifoods was down 66 percent due to limited funding.
Milling volumes at Victoria Foods fell by 57 percent again on the back of limited funding.
On the retail division, turnover went down by 33 percent. Aggressive cost containment measures, however, had a positive impact on the operating income of the division.
The group was also finalising plans that will see Farm and City upscaling its activities.
On residential development projects, Nyika said collections on the Saturday Retreat project are going on well and the group has to date recovered 14 percent of the compensation due from beneficiaries. The group is currently working with reputable developers to further unlock value on the remaining land portions.
According to acting chairperson Grace Muradzikwa, the group is evaluating proposals for a joint venture with strategic technical investors for the poultry division for the efficient and effective utilisation of the Group’s Poultry infrastructure.-FinX
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