23 September 2011

Zimbabwe: Padenga Achieves U.S.$19,6 Million Sales Target

CROCODILE skin processor Padenga Holdings achieved its sales target of US$19,6 million for the 11 months to June 30 2011, buoyed by improved prices as the world economy recovers from recession.

The company says its target was achieved by holding back on stock during the economic depression when prices were low. The move is now paying dividends after prices firmed.

The company's main markets are Europe and America. Padenga CEO Gary Sharp told businessdigest this week that sales of crocodile skin have been steady over the past three years at US$11,8 million in 2008, US$10,2 million in 2009 and US$11,7 million last year.

Padenga chairman Ken Calder said the full-year culling target was achieved at a grade-quality better than budgeted. He said all skins were graded by customer representatives and resulted in an 88% first grade ratio against a full year target of 80%.

"The average skin size achieved was 4% below the budgeted size and is attributed to a loss of growth resultant from frequent dietary formulation changes that occurred as a consequence of the ban on the importation of certain animal feed," Calder said.

The board declared a final dividend of 0,166 US cents per share in its first year as a publicly listed company on the local bourse. Padenga's operations closed the year with a total of 115 704 animals on the ground, made up of 110 660 grower crocodiles and 5 044 breeders. The grower crocodiles are aged between seven months and three years and are housed at ideal densities in the pens.

"Breeders are made up of 1 948 mature breeders and 3 096 immature breeders aged between six and nine years," said Calder. "The main focus of the capital expenditure projects in the period has been to improve pen floor surface across all farms as well as to increase breeder pen space at Ume Crocodile Farm," he said.

He said the construction projects will continue into the next financial year to ensure that skins are not compromised by abrasive floors and to provide the appropriate facilities for the large crop of young breeders that are reaching reproductive maturity in line with the company's objectives of becoming self sufficient in domestic egg production by 2014.

"A total of 45 389 crocodiles were culled during the eleven months under review against a budget of 45 306, all skins produced during the current period were sold," Calder said.

This brought the total number of skins sold in the financial year to 62 884. These include the17 495 skins that were in stock at the beginning of the financial period. An operating profit of US$6,2 million was achieved for the period under review, whilst profit before tax came in at just under US$5 million.

"Cash generated from operations amounted to US$6,4 million, the bulk of which was utilised to reduce loans from US$7,8 million at the beginning of the period to a balance of US$2,8 million outstanding at year-end.

"These remaining loans were repaid in full subsequent to year end. New loans will be accessed in the ensuing period to finance working capital before the culling cycle commences," said Calders.

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