In compliance with the Securities Act No. 41 of 2016 and the Listing Requirements of the Lusaka Securities Exchange, Metal Fabricators of Zambia PLC (ZAMEFA) announces its results for the year ended 30th September 2022
Commentary
Revenue at Zmw 2 056 million is 15% lower than the prior year (2021: Zmw 2 424 million). This is as a result of lower sales volumes in the current year. Additionally, as most of the company’s revenue is generated in United States Dollars (USD) the stronger Zambian Kwacha against the USD, resulted in lower revenue in the current year. However, the impact of the stronger Zambian kwacha was partly offset by the pass through effect of higher copper prices in the 2022 financial year when compared to the prior year.
The Operating profit for the year was lower than the prior year mainly due to the lower sales volumes in the reporting period. This was partly mitigated by lower operating expenses in the current financial year when compared to those incurred in the prior year.The finance costs in the current year were lower than those of the prior year mainly due to the effects of a stronger Zambian Kwacha against the USD this year on the USD denominated financing. The average exchange rate for the Zambian Kwacha to the USD was more stable during the year under review, resulting in a relatively small foreign exchange loss of Zmw 0.8 million compared to a large foreign exchange gain of Zmw 44 million recorded in the prior year.
The Company’s cash position improved to a positive net cash position of ZMW 11.3 million compared to a negative net position of ZMW 109.8 million at the end of the prior year. This improvement was achieved through the implementation of strong working capital management measures and the partial collection of long overdue VAT refunds from the Zambia Revenue Authority during the year.
The Company’s Loss per share for the year was (Zmw0.27) while the Earnings per share for the prior year was Zmw1.91.
Liquidation of subsidiary
The Company’s 100% owned South African subsidiary, Fabcorp Pty Limited, which had been dormant for a number of years, was placed into voluntary liquidation at the end of the prior financial year. Therefore, as from 1 October 2021, the Company no longer controlled this entity. As a result, consolidated financial statements were not required to be prepared for the 2022 financial year.