$20m revenue boost for Cambria Africa looms

Published: 06 June 2014

Cambria Africa could get a $20 million revenue boost from the disposal of non-core assets and claims relating to disputes over leased aircraft. This potential revenue could just be the tonic the pan-African multinational needs to overturn a 2014 interim loss, marginally up on 2013.

Cambria recorded a loss of $2.7 million for the six months to February 2014, compared to the $2.6 million loss during the first half of 2013.

The loss came on the back of declining revenue and gross profit from continuing operations at Cambria, being Payserv and Millchem, of $4.2 million and $2.3 million, respectively, in the interim period.

The Alternative Investment Market listed conglomerate has earmarked its Leopard Rock Hotel in Zimbabwe as held for disposal and could get as much as $10 million, the hotel book value.

"The Leopard Rock Hotel continues to be classified by Cambria as held for sale. During the period, the Leopard Rock Hotel Group generated $1,1 million in sales and negative $343,000 in EBITDA," said Cambria.

Cambria is also seeking to recover about $10 million from claims relating to three aircraft leased out by its subsidiary LonZim Air after disputes arising from the state that the leased aircraft were found in.

"Cambria continues to pursue the recovery of claims related to these disputes estimated to be in excess of $10 million," Cambria said.

The group said, Zimbabwe, where the bulk of its revenues are still derived, continues to experience significant liquidity shortages, resulting in it being ranked among the slowest growing economies in sub-Saharan Africa.

Chief executive Edzo Wisman said within Cambria, Millchem's sales at certain points during the period under review were down 60 percent year on year.

The group CEO said that the fact that its main subsidiary, Millchem, posted only a 7 percent year on year sales decline for the difficult period under review was therefore, paradoxically, commendable.

"This slowdown in the Zimbabwean economy continues to impact current performance of our investments, and will do so until a broader regional diversification has been achieved, which Cambria is successfully executing," he said.

Cambria continues to seek the disposal of its remaining non-core assets in order to focus solely on Payserv and Millchem, growing their scale and scope continuing regional expansion.

On May 27, 2014 Cambria announced the acquisition of Chemicals and Marketing Limited, a leading Malawi chemicals distributor, accelerating Millchem's regional expansion with an immediate leading position in Malawi.

Payserv received its National Payments Licence in Zambia, signed its first customers in that country and commenced processing of bulk payments.

Last month, Cambria announced various new regional distribution agreements for Millchem with leading suppliers such as MEKZ, Centlube Sealed AiR/Diversey Care and Donau Carbon among others.
- chronicle

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