Metal Fabricators Zambia (ZAMEFA) has recorded a 10 percent reduction in revenue at the end of its latest financial year, according to a statement from the company.
“Revenue at ZMW1 030 million is 10% lower than the prior period (2021: ZMW1 145 million)”, read the statement published on SENS on 20 May 2022 issued by BDO Zambia Limited – Company Secretaries. “This is as a result of lower sales volumes in the current period under review. Additionally, most of the company’s revenue is derived from USD denominated sales and the stronger Zambian kwacha, against the USD, compared to the same period in the prior year, negatively affected the revenue in this 6-month period”.
The bullish run that copper has experienced over the last 12 months cushioned the company. “However, this was partly offset by the pass through effect of higher copper prices in the first half of the 2022 financial year when compared to the corresponding period last year”.
The lower revenue meant that profitability was impacted compared to the previous financial year. “The gross profit for the period was lower than the corresponding period in the prior year mainly due to the lower sales volumes in the reporting period. This was partly offset by lower operating expenses in the reporting period when compared to those achieved in the corresponding period in the prior year”.
The company had lower capital structure costs thanks to an appreciating Kwacha. “The finance costs in the period under review were lower than those of the corresponding period in the prior year, mainly due to the effect of a stronger Zambian kwacha exchange rate against the USD in the current year on the USD denominated funding. The average Zambian kwacha to USD exchange rate depreciated in the period under review resulting in a foreign currency exchange loss of ZMW 18,9 million (2021: ZMW24,5 million)”.
Overall, the company recorded a loss after tax. “The Group and Company’s Loss per share for the period under review were (ZMW0.81) and (ZMW0.81) while the Loss per share for the comparative period of 2021 were (ZMW0.53) for the Group and (ZMW0.55) for the Company”.
