Padenga release a muted set of financials

Published: 26 September 2013

Padenga Holdings Limited posted a muted set of financials as the culling of the Niloticus was delayed in order for the operation to realise best quality skins. Nonetheless, the business fundamentals remain very solid.

The group changed its year-end to December from June hence the reported numbers are for 12 months.

The number of Niloticus skins sold declined by 65.1% year on year to 15,026 skins against a target of 43,000 skins.

The fair value adjustment on biological assets for the Niloticus operation grew 673% year on year to $9.1m as there were more crocodiles of a cull-able age as at 30 June 2013 than for the corresponding period (99,588 crocs against 66,329 for the prior period). The alligator operation posted a profit before tax 1.4m while the Niloticus operation reported an operation loss of $3.1m.

Cash generation was strained due to the delayed culling and the resultant high working capital requirements. Although net gearing deteriorated to 22.5% from 4.9% it remained manageable.

Imara Edwards Stockbrokers analyst Addmore Chakurira said they believe that the skin quality will be significantly higher going forward resulting in higher realisations.

"We estimate that the first grade skin ratio is likely to exceed 90%," said Mr Chikurira.

The alligator operation plans to increase production with barns to house approximately 10,000 alligators already completed. A new alligator skinning facility was also constructed as well as a new meat processing plant. The total capex for the alligator business amounted to $1.2m and capex for the group was $2.3m.

The company's FY 2013 target of 43,000 skins is fully contracted for sale and Padenga anticipates receiving premium prices.

Imara maintains its buy recommendation to clients.
- imara

Tags: Padenga,