By Almot Maqolo.
HARARE – Zimbabwe’s economy already suffering from hyperinflation has affected CAFCA’s capacity to finance increased investment in its day-to-day operations.
The southern African nation’s inflation rate jumped to 676.39% year-on-year in March from 540.16% the previous month.
“Hyperinflation is seriously affecting our ability to finance increased investment in working capital,” said the company in a statement on Wednesday.
“Access to bank facilities is being hindered by the inability of banks to increase facilities due to their own constraints. Despite bank facilities being in place of $45 million the most CAFCA has been able to utilise is $26 million.’
However, the cable manufacturer says it is still pursuing its monthly sales model of 140 tonnes despite the adverse effects of covid-19 on the local market and export market and supply chains.
“Assisting CAFCA to mitigate these threats are our finished goods stock of 746 tonnes and our export consignment stocks arrangements. We have commitments from our raw materials suppliers that our immediate needs will be met with only our imported spare parts requirement being a minor challenge,”
“Despite the expected local market liquidity constraints indications from our local customers are that local sales expectations will be met.”
In the six months ended 31 March 2020, CAFCA’s volumes stood at 836 tonnes, representing a marginal decline from 844 tonnes in the comparative period.
However, export volumes rose from 11% to 14% of sales.
In historical cost ZWL$ terms turnover increased 1012% to $206.9 million from $18.6 million previously.
Profit before tax surged to $83.1 million from $3.5 million in the comparable period. This attributed to inflation benefit of carrying large stocks of finished goods and no foreign liabilities plus the gain on export debtors and foreign bank and cash balances. The company did not declare a dividend.
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