Cottco expects profitability in 2016

Cottco expects profitability in 2016
Published: 27 June 2014
Cottco Group Limited has recorded a significant $6,9 million profit less than it recorded the prior year and is now expecting to start seeing profits in two years.

Head of finance Dacyl-Ray Rambanepasi told an AGM yesterday that the group recorded a significantly less profit than they had in the previous year. "Cottco’s profit after tax from continued operations declined by 484 percent from $9,6 million to $2, 7 million recorded in the previous year," she said.

She added that although operating profits were beneath prior year, a $2,6 million profit has been recorded.

"Our operating profits though lower than what we achieved last year we have got a profit after tax of $2,6 million, this is because the business has posted a profit on the disposal of Seedco and Olivine of $37 million," she said.

Collins Chihuri, the group's managing director, said they are putting in efforts to reduce the future level of losses but are only expecting to witness a profit in 2016. ”We have made a loss and we are working hard to reduce the level of the loss and at best it will be break even. We will not be in a profit zone this time around but in 2016 we have got to be in profitable territory" said Chihuri.

According to Chihuri the group has proudly contributed $31 million towards national funding.

"If we look at overall national funding this year as an industry we have put in a minimum of about $31 million compared to the $24 million in the previous season, so there has been a fair share of funding from ginners this season" he said. Financial statements show that sales volumes for the company decreased 77 percent to $35 million recorded for the year ended March 2014 from $150 million recorded in the prior period "Our sales volumes are down as a result of the national crop production and our share of it which both declined in the year under review. The decline by 67 percent was mostly driven by that particular decline" said Rambanepasi.

According to Rambanepasi the strengthening of the international lint prices did not improve the group's sales volumes.

"As expected volumes are down meaning our revenue has come down despite the firming of lint prices. Lint prices on the international market improved from 80 cents per pound last year and the business itself achieved an average of 89 cents per pound. As a result we are seeing declining operating margins from the cotton business," she said.

The group's financials show their debt as at March 2014 reduced 66 percent from $126 million in the previous period to $41,6 million.
- BH24
Tags: Cottco,


Latest News

Latest Published Reports

Latest jobs