Wrap Text
Audited Abridged Financial Results for the full year ended 30 September 2024
Cafca Limited
Incorporated in terms of laws of Zimbabwe(Zimbabwe Registration number:40/1945)
Share Code: CAC
ISIN Code: ZW0009011942
("CAFCA" or "the Company")
Notice To Shareholders
Audited Abridged Financial Results for the full year ended 30 September 2024
All figures are in Zimbabwean Gold (ZWG)
Chairman's Statement
I am pleased to be presenting the performance of CAFCA for the financial year ended 30 September 2024.
Performance Overview
The challenges emanating from the trading environment have caused significant headwinds impacting on the performance of CAFCA. Volumes were ahead
of prior year by 10% albeit with the sales mix skewed towards low margin sales. Therefore, the reported revenue and operating profit in
Zimbabwean Gold (ZWG) were lower than prior year by 5% and 18%, respectively. Overall, the Company has maintained a strong and healthy balance
sheet.
Trading Environment
The trading environment has been volatile during the year under review. The decline in commodity prices of most metals and alloys, as well as
impact of the drought for the 2023/24 agricultural season dampened aggregate demand. Currency instability reflected by the inflation rate at
37.5% in September 2024, and exchange rate fluctuations, remain a significant challenge to value preservation.
On a positive note, the construction sector was buoyant spurred by the road construction activities, new housing and property development
projects, as well as firm prices obtaining for gold.
People & Governance
The Board continues to prioritise sustainability, and governance matters as these are core to the Company's strategy execution namely safety,
wellness, skills adequacy, systems and compliance.
a. Safety & Wellness
The Company continues to maintain a heightened approach to the identification of safety and wellness related risks in order to achieve zero harm
to our human and physical capital, as well as reduce operational disruptions. As a result, the lost time injury frequency rate (LTIFR) decreased
by 11% against prior year. In addition, the Company received an award from the National Social Security Authority (NSSA) as recognition for the
company's good record on safety and health performance.
Through the Company's health service provider, wellness programs have been extended to all our people to ensure the good mental and physical
health.
b. Skills Adequacy
The balance of skill and experience at all levels is important to the success of CAFCA. To that end, there is diversity in competences and
backgrounds that our Board members bring to CAFCA's sustainability. The Company also continues to invest in training and development of staff
through learnerships for apprenticeships and graduates, as well as management and leadership development programs.
During the year, the Board appointed Mr. Vimbayi Nyakudya, as CEO from 1 June 2024. I would like to thank Mr. Rob Webster for his valuable
contribution to CAFCA over the past 17 years.
c. Systems & Compliance
CAFCA does not compromise on quality and therefore has continued to deepen its strength in the internal control system to maintain the right
quality standards. CAFCA remains certified on Quality (ISO9001:2015), Environmental (ISO14001:2015), Occupational, Health & Safety
(ISO45001:2018) and Energy Management systems (ISO50001:2018) by the Standard Association of Zimbabwe (SAZ) and South African Bureau of Standards
(SABS).
d. Innovation & Strategy
The Board remains focused on the effective execution of the strategy by tracking risks and opportunities as well as major events that have a
bearing on the company's sustainable performance. The Board is currently seized with driving CAFCA's strategy to achieve competitiveness through
modern approaches to supply chain management, technological advancements, power and manpower utilisation. In addition, CAFCA implores the
government through the Ministry of Industry and Commerce to implement policies that will not only balance the interest of all stakeholders but
also protect the Zimbabwean industry.
Dividend
Given cash flow considerations, the Board declared a dividend of US4.9 cents per share. In the prior year, the dividend per share was US 7.9
cents.
Outlook
Whilst the outlook remains challenging, the Board believes CAFCA is positioned to tackle the threats, and to take advantage of the opportunities
that lie ahead. The company's depth of experience in the Zimbabwean market and the region puts CAFCA in a competitive position to drive market
growth, capacity utilisation and effective capital allocation.
Conclusion
I would like to thank our stakeholders namely our customers, suppliers, service providers, shareholders, fellow Board members, management and
staff for the support in driving CAFCA performance.
H. P. Mkushi
Board Chairman
30 Sept 2024 30 Sept 2023
Abridged Statement of Profit or Loss and other
Comprehensive Income for the year ended ZWG ZWG
30 September 2024
Revenue 598,389,003 629,940,533
Operating profit 198,853,990 243,621,128
Finance income 331 137
Finance cost (5,283,609) (11,325,615)
Monetary gain/(loss) (12,400,401) 13,740,028
Profit before income tax 181,170,311 246,035,678
Income tax expense (57,416,963) (46,402,249)
Profit for the year 123,753,348 199,633,429
Other comprehensive income:
Revaluation gain net of tax 477,599,169 -
Total comprehensive income for the year 601,352,517 199,633,429
Issued Ordinary Shares (weighted) (number) 33,949,000 33,789,000
Basic Earnings per share (ZWG cents) (note 10) 365 591
Diluted Earnings per share(number) 33,949,000 33,949,000
Diluted Earnings per share (ZWG cents) (note 10) 365 588
Headline earnings per share(number) 33,949,000 33,789,000
Headline Earnings per share(ZWG cents) (note 10) 362 588
USD USD
2024 2023
Dividend per share (USD cents) 4.9 7.9
Abridged statement of Financial Position
As at 30 September 2024
30 SEPT 2024 30 SEPT 2023
ASSETS ZWG ZWG
Non-Current Assets
Property ,plant and equipment 519,092,661 11,673,259
Current assets
Inventories 321,029,183 266,337,596
Trade and other trade receivables 72,180,486 90,765,535
Cash and cash equivalents 14,361,284 10,331,107
Income tax asset - 5,754,370
Total Assets 926,643,614 384,381,867
Share capital and reserves
Share Capital 887 887
Share premium 7,609,604 2,709,246
Share option reserve - 4,976,618
Retained earnings 330,725,954 246,671,209
Revaluation reserve 477,599,169 -
Total Equity 926,643,614 384,861,867
LIABILITIES
Non-current liabilities
Deferred income tax liabilities 21,389,587 26,667,446
Current liabilities
Bank overdrafts - 15,082,156
Trade and other payables 29,107,152 18,781,359
Provisions for other liabilities and charges 15,860,583 13,922,060
Current income tax liabilities 1,531,824 -
Dividend payable 42,818,854 56,050,886
Total current liabilities 89,318,413 103,836,461
Total equity and liabilities 926,643,614 384,861,867
Abridged Statement of Changes in Equity
For the year ended 30 September 2024
Share Capital Share Premium Share Option Revaluation Retained
Reserve reserve earnings Total
ZWG ZWG ZWG ZWG ZWG
Balance at 1 October 2022 887 2,384,851 3,394,207 - 103,088,666 108,868,611
Transaction with owners:
Share options exercised - 128,677 - - 128,677
Share options expense - - 1,778,129 - 1,778,129
Transfers between reserves - 195,718 (195,718) - -
Dividend declared - - - (56,050,886) (56,050,886)
Total comprehensive income for the year - - - 123,753,348 601,352,517
Profit for the year - - - 123,753,348 123,753,348
Other comprehensive income for the year - - - - - -
Balance at 30 September 2023 887 2,709,246 4,976,618 - 246,671,209 254,357,960
Balance at 1 October 2023 887 2,709,246 4,976,618 246,671,209 254,357,960
Transaction with owners:
Share options exercised - 25,488 - - 25,488
Share option expense - - (101,748) - (101,748)
Transfers between reserves - 4,874,870 (4,874,870) - -
Dividend declared - - - (41,387,905) (41,387,905)
Total comprehensive income for the year - - - 123,753,348 123,753,348
Profit for the year - - - 123,753,348 123,753,348
Other comprehensive income for the year - - - 477,599,169 - -
Balance at 30 September 2023 887 7,609,604 - 477,599,169 329,036,652 814,246,312
Abridged Statement of Cash Flows for the year ended 30 September 2024
30 SEPT 24 30 SEPT 2023
ZWG ZWG
Profit before income tax 181,170,311 246,035,678
Depreciation 288,709 1,750,407
Net loss/(gain) on net monetary assets (807,863) (13,740,028)
Non-cash employee share based payment charge (101,748) 1,778,129
Profit on sale of property plant,
and equipment (807,863) (960,594)
Finance income (331) (137)
Finance cost 5,583,609 11,325,615
Working capital changes:
Decrease in inventories (54,691,587) (135,427,491)
Decrease/(Increase)in trade and other receivables 18,585,049 (61,841,657)
Increase in trade and other payables 10,325,793 12,387,118
Increase in provision for other liabilities 1,938,523 6,605,930
Cash generated from operations 174,390,463 67,912,971
Tax paid (19,716,112) (51,928,403)
Finance cost (5,583,609) (11,325,615)
Finance income 331 137
Net cash generated from operating activities 149,391,073 4,659,090
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property ,plant and equipment (5,905,634) (6,450,585)
Proceeds from sale of property,plant and equipment 807,863 960,594
Net cash utilised in investing activities (5,097,771) (5,489,991)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of share capital 25,488 128,677
Decrease in borrowings - (3,096,323)
Dividend paid (52,930,635) -
Cash utilised in financing activity (52,905,147) (2,967,646)
Increase in cash and cash equivalents 91,388,155 (3,798,546)
Cash and cash equivalents at the beginning of the year ( 4,751,049) (3,916,785)
Effects of inflation on cash and cash equivalents (72,275,822) 2,964,283
Cash and cash equivalents at the end of the year 14,351,284 (4,751,049)
NOTES TO THE ABRIDGED FINANCIAL STATEMENTS
For the year ended 30 September 2024
1 General information
CAFCA Limited (the "Company") manufactures and supplies cables for transmission and distribution of energy. CAFCA is primary listed on the Zimbabwe Stock Exchange and secondary listed on the Johannesburg
Stock Exchange.
2 Basis of preparation
The financial statements of CAFCA Limited have been prepared with an aim to comply with IFRS® Accounting Standards and in the manner required by the Zimbabwe Companies and Other Business Entities Act
(Chapter 24:31),except for non compliance with International Accounting Standard(IAS)21 -The Effects of Foreign Exchange Rates.
The financial statements have been presented in Zimbabwe Gold(ZWG) and all values are rounded off to the dearest dollar except otherwise indicated.
3 Functional and presentation currency
In February 2019, the Government of Zimbabwe issued Statutory Instrument 33 of 2019, which prescribed parity between the United States Dollar (USD) and the local currency as at and up to the effective date
of 22 February 2019. The Company adopted the Zimbabwe Dollar (ZWL) as its functional and reporting currency in 2019 in line with the requirements of the law. For 2019 and subsequent financial years, the
Directors and management determined that the Company's functional currency is ZWL based on requirements of IAS 21.
On 29 March 2020, The Government of Zimbabwe then issued Statutory Instrument 85 of 2020 which was valid until 30 June 2025 which reintroduced the use of multi-currencies. The cut off date was further
extended by Statutory Instrument 218 of 2023 gazetted on 27 October 2023 which extended the multi-currency regime to 2030.
After the multi-currency extension, significant inflationary pressures on the ZWL led to an increase in the level of USD transactions for the period under review. The income statement was dominated by USD
transactions.
The Company continued to use the ZWL as its functional and reporting currency for the year ended 30 September 2024 whilst monitoring the economic developments to determine whether there will be need to
change the functional currency in the near future.
On 5 April 2024, the Government of Zimbabwe through Statutory Instrument 60 of 2024, introduced a new currency, Zimbabwe Gold (ZWG) to be the unit of account for transactions previously denominated in
ZWL. Following the introduction of ZWG, management reassessed the functional currency and determined that the USD continued to be the Company's functional currency.
Due to uncertainties naturally obtaining in a multi-currency system and the subsequent change from ZWL to a structured currency, ZWG, the directors opted to delay the formal adoption of USD as functional
currency.
The Directors believe that based on the period of time among other factors that the ZWG has been in the market, it is premature at this stage to conclude whether there have been changes in circumstances that
would make the economy non hyperinflationary or not. Consequently, the Directors will continue to observe the behaviour of the economy and follow guidance from the Public Accountants and Auditors Board
(PAAB).
Conversion from Zimbabwe Dollar to Zimbabwe Gold
Following the Introduction of the Zimbabwe Gold Currency by the Reserve Bank of Zimbabwe (RBZ) on 5 April 2024 and the Statutory Instrument (SI) 60 of 2024, all the previously existing Zimbabwe Dollar (ZWL)
balances were converted into ZWG as at that date. The swap rate of ZWG 1: ZWL 2 498.7242 was used as guided by the closing interbank exchange rate and the price of gold as at that date. The previously
reported balances and transactions between 1 October 2023 and 31 March 2024 were inflated to the 31st of March 2024. These amounts were converted using the same rate for adoption as the comparative
balances and current balances in these financial statements for the period ended 30 September 2024.
3.1 Change in functional and presentation currency from Zimbabwe Gold (ZWG) to United States Dollars (USD).
The Directors reassessed the functional currency of the Company and determined that the USD continued to be the currency that best reflects the underlying transactions and events and conditions relevant to
the Company in accordance with the requirements of IAS 21. Following the reassessment the Company changed its functional and presentation currency from ZWG to USD with effect from 1 October 2024.
The change was influenced by several factors, including the increased level in USD transactions following the promulgation of Statutory Instrument 218 of 2023 gazetted on 27 October 2023 which extended the
multi-currency regime to 2030.
Management also considered the following;
a) The currency that mainly influences the sales prices for the goods and services.
b) The currency of the country whose competitive forces and regulations mainly determine the sales price of its goods and services.
c) The currency that mainly influences labour, material and other costs of providing goods or services.
4 Going Concern
Management has assessed that the Company will continue operating as going concern, citing the following: -
a. The Company has no exposure to foreign liabilities.
b. The Company has stock cover of 3 months in finished goods.
c. The Company has adequate working capital and facilities from local banks
d. Demand for cable remains strong.
5.Independent external Auditor's statement
These abridged financial statements derived from the audited financial statements of CAFCA Limited for the financial year ended 30 September 2024, should be read together with the complete set of audited
financial statements of the Company for the year ended 30 September 2024, which have been audited by Grant Thornton Chartered Accountants (Zimbabwe) and the auditor's report signed by Edmore Chimhowa,
Registered Public Auditor 0470. An adverse opinion has been issued on the audited financial statements regarding the non-compliance with International Accounting Standard (IAS)21-The Effects of Changes in
Foreign Exchange.
The auditors determined that other than the matters described in the Basis for adverse Opinion section of the auditor's report, there were no other key audit matters to communicate. The auditor's report on the
financial statements and the full set of the audited financial statements, are audited statements, are available for inspection at the Company's registered office and the auditor's report has been lodged with the
Zimbabwe Stock Exchange.
6.Related party transactions
30 SEPT 30 SEPT
2024 2023
ZWG ZWG
i.Purchases of goods
CBI-Electric African Cables-A Division of ATC( Pty) Limited 3,308,327 2,321,108
Metal Fabricators of Zambia Plc(Zamefa) 72,808,198 52,858,899
ii.Sale of goods Metal Fabricators of Zambia plc( " Zamefa") - 24,064
Key management remuneration:
Key management includes directors (executive and non-executive)
and members of the executive committee
Salaries and short term benefits 23,218,575 29,069,807
Share options charge (101,748) 1,778,129
Director' emoluments
-Fees 1,530,694 966,756
Total 24,647,521 31,844,692
7.Segmentation information
Revenue is primarily from customers who are domiciled in Zimbabwe and
revenue from external customers pertains mainly to customers domiciled
in Malawi, Rwanda and Mozambique.
Revenue analysis 30 SEPT 2024 30 SEPT 2023
ZWG ZWG
Revenue from customers domiciled in Zimbabwe 544,911,101 577,081,634
Revenue from external customers 53,477,902 52,858,899
These revenues are attributable to customers domiciled in Zimbabwe. The breakdown of the major component of total revenue from three major
customers of at least 10% is as follows:
30 SEPT 2024 30 SEPT 2023
ZWG ZWG
Utilities 55,353,568 85,371,901
The segment information provided to the executive team for the
product reportable segments for the year ended 30 September are
as follows:
Revenue from customers 598,389,003 629,940,533
Profit before interest and taxation 198,853,990 243,621,128
Net finance income 331 137
Finance cost 5,283,609 11,325,615
Income tax expense 57,716,963 46,402,249
Total current assets 926,643,614 384,861,867
Total liabilities 112,397,302 130,503,907
8.Capital commitments
The Company had no significant capital commitments authorised or contracted for at the reporting period (2023:ZWG Nil)
30 Sept 2024 30 Sept 2023
ZWG ZWG
9.Property plant and equipment
Capital expenditure 5,905,634 6,450,585
Depreciation 288,305 1,750,407
10.Reconciliation of basic earnings per share to headline earning per share
30 Sept 2024 30 Sept 2023
ZWG ZWG
Profit for the year attributable to CAFCA LTD shareholders 123,753,348 199,633,429
Adjustment to basic earnings
-Profit of disposal of fixed assets (807,863) (860,594)
Headline earnings attributable to CAFCA LTD shareholders 122,945,485 198,633.835
COMMENTARY AND OVERVIEW OF RESULTS
Overview
Volumes increased by 10% year on year, on the back of increase in aluminum volumes.
Revenue and Profitability
Revenue decreased from ZWG$630m to ZWG$598m due to sales mix of more aluminum sales than copper sales.
Profit for the year was down by ZWG$76m. Earnings per share decreased by 38% year on year.
Statement of Financial Position
Inventories increased by ZWG$55m whilst Trade receivables decreased by ZWG$18m. Receivables are mainly US$ debtors and prepayments for raw materials.
The Company ended the year with no borrowings.
Dividend Declaration
The Directors have recommended payment of a dividend at 4.9USD cents per share, payable on the Monday,27 January 2025 as detailed in the Dividend Declaration Notice dated 19 November
2024.
Future Outlook
The Company anticipates growth in volumes.
Results Announcement
This results announcement is the responsibility of the Board and is only a summary of information contained in the full set of audited financial statement for the year ended 30 September 2024
("AFS") which is available JSE cloundlink at:
https://senspdf.jse.co.za/documents/2024/jse/isse/cac/CAF24.pdf and on the company's website at : https://www.cafca.co.zw
Any investment decisions made by investors and/or shareholders should be based on a consideration of the AFS.
By order of Board
C Kangara
Company Secretary
19 November 2024
H.P Mkushi (Chairman) E.T.Z Chidzonga T.Chigumbu L.Corte S.E Mangwengwende S.Maparura J.Tapambgwa
Date: 19-11-2024 04:51:00
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