HARARE – Padenga Holdings has issued a profit warning saying forthcoming results for the year to December 31, 2020 will have lower earnings than the comparable year ago period.
This comes as luxury shopping behaviour, channel dynamics and travel plans saw inevitable shifts as a result of Covid-19 lockdowns, as well as the closure of select retailers across the world.
The group sells its skins to one customer, Hermes.
In a statement, Padenga said its crocodile and alligator business was the most affected subsidiary owing to the depressed trading environment due to Covid-19 and the softening of international markets for luxury exotic skin products.
The group’s chairman, Thembinkosi Sibanda, revealed that they had limited sales opportunities for skins not meeting exacting quality standards and when found, sold at very depressed prices particularly for skin alligators from the United States based subsidiary, Tallow Creek Ranch.
He, however, said both businesses were able to sustain skins supply contracts with premium customers at a time when most crocodilian operations worldwide had no viable market and have ceased production.
“We believe that our customers will be at the forefront of the market recovery post Covid-19 and that we will play our part in making that happen.”
There was also low demand of crocodile meat due to Covid-19 induced lockdowns which saw the temporary closure of restaurants resulting in no export sales for Padenga.
The group, however, managed to stay afloat owing to the newly acquired Dallaglio mining venture which managed to meet production and revenue expectations and will contribute to the earnings.
Sibanda said stakeholders should expect dull end of year financial results which are characterised by a significant reduction in profits relative to prior year. In F19, group revenue was at US$29.12 million and attributable profit at US$6.91 million.