ZAMEFA Attributes Revenue Growth to Kwacha Depreciation
Metals Fabricators of Zambia PLC (ZAMEFA) has reported a notable 36% increase in revenue, reaching ZMW 1,400 million for the six-month period ending 31 March 2024, up from ZMW 1,000 million the previous year. Operating profit also grew significantly to ZMW 83 million from ZMW 37 million.
ZAMEFA, a subsidiary of South African company Reunert LIMITED, was founded in 1968 and privatised in 1996. The company’s financial results, signed by the Company Secretary, highlight the depreciation of the Zambian Kwacha as a key factor in the revenue surge.
The weaker Kwacha against the US Dollar (USD), in which much of ZAMEFA’s revenue is generated, has boosted revenue.
“Revenue increased by 36% to ZMW 1,396 million compared to the prior year (2023: ZMW 1,028 million). The depreciation of the Zambian Kwacha against the USD contributed to higher revenue,” the company stated.
Higher sales volumes and improved gross profit margins also contributed to the growth. The company’s net foreign liability reduction mitigated foreign exchange losses to ZMW 24.1 million, down from ZMW 52.9 million.
However, finance costs rose by 38% to ZMW 20.1 million, largely due to the Kwacha’s weakening.
ZAMEFA’s cash position at the end of the period improved significantly, with net cash rising to ZMW 167 million from ZMW 35 million. This substantial revenue growth has sparked debate over the impact of the Kwacha’s depreciation on the economy.
Source: ZBT
