New Zimbabwe.com

Croc processor reports 36pc surge in profits

LISTED crocodile farming group Padenga Holdings reports a 36% surge in full-year profit attributable to shareholders with management saying there was significant potential for increased capacity.
“Demand for quality skins … remains exceptionally strong,” said Padenga chairman Alexander Calder. The group will focus on producing top-quality skins to satisfy rising demand from luxury goods and apparel makers, he said.
Basic earnings per share for Padenga improved from 0.63 US cents a year ago to 1.23 c this year. Profits attributable to shareholders for the full year under review climbed 36% to $4.7m, while it posted a profit before tax of $7m.
“These results are wholly in line with the strategy to delay culling in order to deliver the best skins possible to the market,” Calder said.
By the end of June, Padenga had sold 15,026 skins, a significant decline from the firm’s initial target of 43,000 skins. Calder said the remainder of the skins would be sold in the 2014 first-half period, to end December.
“There were significantly more crocodiles (99,588) of cullable age on the ground at June 30 compared to the prior year (66,329). This was a consequence of the delayed culling and will be realised in turnover by the revised year end of December 31,” he said.
Crocodile skin is a major component in the manufacture of branded luxury goods and apparel such as handbags, belts and jackets while crocodile blood is used as a food supplement to promote health due to its haemoglobin levels.
Crocodile oil is used as a cure for skin problems and other ailments.
In order to reduce operational costs, Padenga stated that it had developed a meatless diet for its animals, which followed scaled-down production in previous reporting periods to concentrate on the quality of skins produced.
Located on the shores of Lake Kariba, Padenga operates at least four crocodile farms in the country and most of these rely on wild egg collections, while it is boosting its US alligator-rearing business in Texas.
Although global economic woes may have eroded the value of developing currencies such as the rand, the market for luxury goods products has remained strong owing to the widening of the gap between the upper and lower classes of society, as well as a fast-rising middle class that has a huge appetite for luxury goods, said a Zimbabwean retailer for imported exclusive apparel.Advertisement

Padenga is changing its reporting year-end period from June to December. It’s Lone Star Alligator Farms in the US recorded turnover of $1.7m recorded from the sale of 7,882 alligator skins. Profit before tax for the US unit was $1.4m