HARARE, May 14, (The Source) – Cable manufacturer Cafca’s revenue grew by 41 percent to $14 million for the six months ended 31 March compared to the prior year driven by exports and local sales but the company bemoaned poor prices which hit earnings.
Operating profit was eight percent up at $1,1 million despite to high costs associated with its furnace.
“We have recommissioned the melting furnace to improve the rate at which we can process recycled copper – this is not only significantly increasing the amount of electricity we use but also has high operating costs in terms of consumables and running costs, ” said the company in a statement on Thursday.
Volumes grew by 72 percent but poor prices on both local and export markets meant revenue was lower than expected.
“The volumes generated less revenue per tonne than in the previous period for a number of reasons. Firstly, exports were at low margins reflected in revenue per tonne being 20 percent lower than in the local market,” said the company.
“Secondly, sales in the local market were discounted by 15 percent at the beginning of the year as a strategy to combat imports. Thirdly, sales on the barter deal (with ZESA) are mainly aluminium where aluminium per tonne sells for around a third of the revenue compared to copper.”
The company is banking on converting copper stocks to finished goods and selling them to generate cash.