Crocodile-skin produder, Padenga Holdings has notified its shareholders of a significant reduction in profits for the financial year ended 31 December 2020 relative to prior year due to the negative effects of the COVID-19 induced lockdowns in key European markets.
The warning is a precursor to the financial results to be released at a date to be announced and has advised shareholders to trade their shares with caution.
“The Board of Directors of Padenga Holdings Limited wished to advise shareholders of a material change in the Group’s profits for the 2020 trading year,”
“The Group’s crocodile and alligator businesses have been impacted by market dynamics resultant from the COVID pandemic and in particular a softening of international markets for luxury exotic skin products resulting in one of the most depressed trading environments ever,” said Padenga Holdings Chairperson, Thembinkosi Sibanda.
There were limited sales opportunities for skins not meeting exacting quality standards and when found, sold at very depressed prices particularly for alligator skins from the United States based subsidiary, Tallow Creek Ranch.
The closure of restaurants across Europe due to COVID -19 induced lockdown meant that demand for crocodile meat collapsed completely and no export sales were achieved in the period.
“Notwithstanding these challenges, 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,” said Sibanda.
However, the Group will seek redemption in its newly acquired Dallaglio mining venture which has so far met production and revenue expectations, the company says.
Padenga is one of the country’s major exporting companies, with its premium Nile crocodile skins used to make high-end products like hand bags, belts and watch buckles world-over.
