CFI overturns loss, posts profit after tax of ZiG493,64m in H1

Despite a 30,4% increase in revenue to nearly ZiG1,46 billion, from the prior period, CFI reported an operating loss before financing costs, depreciation and impairment of ZiG59,15 million.

AGRICULTURAL-BASED industrial holding firm, CFI Holdings Limited, has overturned its loss-making position to post a profit after tax of ZiG493,64 million in its half-year ended March 31, 2025. This is attributed to a monetary gain of ZiG672,41 million, the company said.

This marks a sharp recovery from a ZiG348,96 million loss reported during the prior year.

Beneath the headline profit, however, the company’s financials raise questions about the sustainability of its core operations.

Despite a 30,4% increase in revenue to nearly ZiG1,46 billion, from the prior period, CFI reported an operating loss before financing costs, depreciation and impairment of ZiG59,15 million.

Unlike most companies that provide a breakdown of how such losses arise, CFI did not disclose this detail in its income statement.

Still, the operating loss at this early stage suggests the company’s day-to-day costs outpaced its income, pointing to an unsustainable business model in its current form.

The profit after tax, then, appears to stem not from operational efficiency, but from a one-off net monetary gain, mainly due to currency devaluation.

In the prior period, the company had posted a net monetary loss of ZiG53,61 million, highlighting just how much the currency shift has skewed the latest results.

“Group inflation-adjusted revenues for the half-year increased by 30,4% from ZiG1,12 billion in the previous year to ZiG1,46 billion. This increase largely reflected on the official devaluation of the local currency on 26 September 2024 from USD1:ZWG13,56, which had obtained since the introduction of the new currency on 5 April 2024 to USD1:ZiG24,40,” CFI said in a statement attached to its half-year financials for the period ended March 31, 2025.

“Overall, retail operations contributed 85,04% (2024- 78,2%), food manufacturing and down-packing operations contributed 9,06% (2024 – 15,42%), group properties accounted for 3,4% (2024– 3,55%), and farming operations accounted for 2,5% (2024– 2,82%) to the group’s turnover.

“Group performance was adversely affected by competitive pressures from the growing informal sector, forcing selling prices to decrease without the corresponding decline in costs.”

CFI said as a result, margins for the key revenue drivers declined significantly.

CFI operates retail, farming, property development, food manufacturing and down-packing and poultry divisions.

“Furthermore, the group incurred unrealised exchange losses of ZiG51,2 million (2024 – ZiG235,4 million) on its foreign currency-denominated loans,” CFI said.

“However, due to the high debt position, the group reported net inflation-adjusted monetary gains of ZiG672,42 million (2024 - ZiG53,62 million loss).”

The group invested ZiG6,36 million into property, plant and equipment, mostly towards retooling and plant spares at Glenara Estates and Victoria Foods, its farming and FMDP subsidiaries, respectively.

“Going forward, the group remains focused on sharp procurement strategies, particularly for the grain commodities, and will prioritise continued investments in its milling operations to underpin their long-term competitiveness,” CFI said.

“Long-term focus remains directed towards the development of low-cost housing delivery in Harare South in support of the government's Vision 2030 on housing.”

CFI said it would therefore maintain its efforts to resolve all issues affecting its interests in its land banks to make way for progressive, orderly infrastructure deployment and service delivery to the various settlements.

“Your board will also continually strengthen its human capital base, improve business models to be adaptive to the changing environment and strengthen its operational systems for the benefit of all stakeholders,” CFI added.

The firm had ZiG1,25 for every ZiG of short-term debt at the end of the half year, leaving the firm in a liquid position to achieve its goals heading into the second half of its financial year.

However, in terms of total assets, CFI recorded a value of ZiG2,26 billion, down from the prior year’s ZiG2,77 billion.

Related Topics