In accordance with the requirements of the Securities and Exchange Act No. 41 of 2016, ZAFFICO PLC announces its results for the half year ended 30 June 2022.
Financial results highlights
In the six-month period to June 2022, the Corporation recorded a profit after tax of ZMW 428.71 million compared to ZMW52.10 million for the same period in 2021. The Corporation’s profit was largely driven by the ZMW594.85 million gain in value of the biological assets. Total sales of ZMW135.12 million was realized in the period under review compared to ZMW 177.89 million in the same period of 2021.The delayed commencement of roundwood sale as well as deferment by some customers in the purchase of roundwood during the first half the year negatively impacted the sales revenue. Further, the sales of treated poles during the first half of the year was significantly lower because of high rainfall which negatively affected the attainment of treatable moisture content
level, thereby affecting the timely production of the treated poles.
The total operating expenses incurred amounted to ZMW 197.60 million during the period under review compared to ZMW 62.03 million of the same period in 2021. The Corporation’s expenditure was largely driven by continued plantation management activities. The significant increase in the operating expenses was due to the change in the accounting estimation of the biological assets from cost valuation method to fair valuation method at end of 2021. Plantation management-related costs which were capitalized under the cost valuation method at half year 2021 were expensed under the fair valuation method at half year in 2022.
Total assets increased to ZMW 3,718 million as at 30 June 2022 compared to ZMW 1,272 million of the same period in 2021. The increase in assets was mainly attributed to the increase in fair valuation of the biological assets following the adoption of the valuation estimation method in 2021. The increase in shareholders’ funds to ZMW3,292 million as at 30 June 2022 from ZMW1,074 million in 2021, was attributed to the gain from biological assets fair value and the profit for the period under review.
The Corporation applied most of its cash flows in the management and expansion of the plantations, closing with cash balance of ZMW12.49 million in the period under review compared to ZMW126.86 million of the same period in 2021.
The Corporation is on course to attain its revenue targets going into the second half of the year. The revenue performance is expected to significantly improve in the second half of the year because the deferred sales are expected to be realized in addition to the second half allocation. Further, the favourable weather condition is expected to enhance treated poles production subsequently increasing sales revenue from treated poles. In addition, the plantation inventory assessment currently being undertaken, once concluded is expected to aid decision making as well as assist to better manage the plantation and subsequently ensure business sustainability.
At the 20th Annual General Meeting, held virtually on 24 May 2022, the Shareholders resolved that a final dividend of ZMW 0.03 per share be declared for the year ended 31 December 2021.
In conclusion, we sincerely thank all our customers, employees, and board members for all the unwavering and continued support
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