Cafca pins hope on copper recycling project

Published: 13 May 2014

Zimbabwe Stock Exchange-listed cable manufacturer Cafca's revenue for the six months period ended March 31, 2014 was up 21 percent to $10 million as the company benefited from a change in strategy to reduce exports to focus on the project of recycling copper locally.

The move also resulted in Cafca boosting its operating profit, which bumped 27 percent.

Said the firm in a statement accompanying the half-year results: "The impact of moving from low margin exports to the higher margin recycling project was reflected in the much improved operating profit which increased by 27 percent from $831 597 to $1 060 325.

"The benefit to the country of recycling and not importing copper for the 6 months was $3,15 million."

Cafca's finance costs were down to $50 738 from the comparative period last year of $59 476 but also well down from the last six-month period of $97 979. Management expects finance costs for the remainder of the year to be minimal as borrowings have been eliminated and they do not intend to borrow again this year.

After providing for taxation, profit for the half year was $779 578 against the comparative period last year of $573 954 an increase of 36 percent which also translated into a basic earnings per share increase of 36 percent.

The consolidated statement of financial position continues to strengthen with borrowings eliminated and current assets covering current liabilities 6 times. The company expects to continue depending on the copper recycling project in view of probable low local sales in the foreseeable future.

"Until there is an injection of capital into the economy we do not expect any improvement in local sales and will continue to be heavily reliant on our copper recycling project.

"As the process of recycling becomes more efficient this will release capacity and focus towards increasing exports again," said Cafca.
- BH24