By Alois Vinga
DIVERSIFIED conglomerate, CFI Holdings Limited has acknowledged that measures put in place by the government to contain inflationary pressures have managed to bring about relative stability on the back of a 39,4% revenue increase posted by the company.
Last year authorities moved to hike interest rates which were recently reduced between 75% to 150% as a way of taming speculative borrowing which fuelled the depreciation of exchange rates on the parallel market.
Other measures such as the inception of gold coins, excess liquidity mop up instruments, tight monetary policy among other measures.
Presenting the performance for the year ended September 30 2022, CFI chairperson, Itai Pasi commended the efforts.
“In the fourth quarter, the government implemented some decisive policy interventions, mainly anchored by an increase in the minimum lending rate from 80% to 200%. The government also introduced gold coins which, together with other measures, resulted in some decline in inflation in the post year-end period,” she said.
The remarks come at a time when monthly inflation slowed from 12,4% in August to 1,1% in January 2023 and has been below the 3% target since November 2022.
Annual inflation receded to 229,8% from 243,8% recorded in December 2022.
Meanwhile, during the period, CFI’s group inflation-adjusted revenues for the year increased by 39,4%, from ZW$ 35,39 billion in the previous year, to ZW$ 49,37 billion attributable to improved sales volumes from Victoria Foods underpinned by continued recapitalisation.
However, aggregate demand for Retail products decreased in comparison to FY2021 following a below normal 2021/22 agriculture season.
Overall, Retail Operations contributed 80.0% (2021- 91.9%), milling operations (Victoria Foods) contributed 17.4% (2021 – 4.3%) and farming operations accounted for 2.6% (2021 – 3.6%) of the Group turnover.
The group incurred unrealized exchange losses of ZW$ 6,1 billion on its foreign currency denominated loans. As a result, the group posted a loss before tax of ZW$2,59 billion against a loss of ZW$0,75 billion for the prior year.
“The Group incurred a ZW$ 0,77 billion inflation-adjusted operational loss inclusive of monetary gains before depreciation, impairment and financing costs compared to an operational profit of ZW$0.4 billion in prior year,” added Pasi.