Padenga Holdings; gold and crocodile skins drive r...

Padenga Holdings; gold and crocodile skins drive revenue, profitability under pressure

Nyashadzashe Ndoro

Zim Now Reporter

Padenga Holdings Limited reported mixed results for the fiscal year 2023 (FY23), with revenue rising on the back of firmer gold prices and improved crocodile skin quality, but profitability facing headwinds from rising costs.

“The operating environment remained challenging, with the Group experiencing unprecedented cost pressures,” the company said in a statement.

“Despite this, Dallaglio remained one of the top three gold producers in the country.”

Gold sales for the period increased by 8% to 2 120kg, driven by higher throughput at the Eureka Mine and the commissioning of the Pickstone Underground Mine in September 2023. The company also benefited from a 9% increase in the average gold price to US$1 945/oz.

Nile crocodile operations also performed well, with skin harvest volumes rising by 49% to 50 675 and a significant improvement in skin quality. The business unit attributed the surge in sales (129% increase year-on-year) to the sale of premium skins deferred from 2022 and previously reported stock.

Padenga Holdings’ group revenue reached US$155.58 million, a 22% increase compared to FY22. However, the company’s earnings before interest and tax dropped to US$26.69 million from US$32.28 million a year earlier, impacted by mandatory surrender requirements, increased operating costs, and the sale of older skins at a discount.

The group closed the year with a profit after tax of US$8.17 million. Cash generated from operating activities increased significantly to US$40.67 million, compared to US$24.60 million in FY22.

Looking ahead, Padenga Holdings says it is optimistic about its future prospects. The company has invested heavily in expanding its underground mining operations and expects further revenue growth from rising gold prices.

“The anticipated increase in gold output compounded by the favourable prices is expected to bolster Dallaglio’s revenue,” the company stated.

“Padenga’s focus remains on producing premium skins which fetch higher prices on the luxury European market.”

Padenga Holdings is also undertaking solar power projects to hedge against rising energy costs. The company, however, acknowledges that profitability may remain under pressure in FY24 due to the inflationary environment.