• Third quarter cable volumes increased 32%, extending year to date growth to 20%
• Revenue rose 31% and profit before tax increased 147% through stronger utilisation and cost containment
• Copper near US$14,500 a tonne raises the next margin and working capital test

Harare- Zimbabwe’s only listed cables manufacturer CAFCA Limited, has recorded a 147% increase in profit before tax during the nine months to June 2026, with stronger cable demand lifting volumes and allowing the manufacturer to absorb a 36% increase in raw material costs.

Year to date sales volumes increased 20%, with local volumes advancing 21% and export volumes increasing 8%. Momentum strengthened during the June quarter, with volumes rising 32% from the comparable period. Revenue grew 31%, supported by higher physical sales and price adjustments introduced to recover rising input costs.

CAFCA is Zimbabwe’s only cable manufacturer and has operated since 1947. The company manufactures electrical, power, solar, telecommunications and related cables and forms part of South Africa’s CBi Electric African Cables, which is owned by Reunert. CAFCA also recycles decommissioned copper and aluminium cables, giving the business an additional source of conductor material.

The June performance shows stronger utilisation of that manufacturing base. Profit before tax increased substantially faster than the 31% revenue growth, pointing to improved fixed cost absorption and cost control from higher throughput. Third quarter volume growth of 32% also ran materially ahead of the 20% nine month rate, showing an acceleration in demand late in the financial year.

The main cost risk has now moved sharply higher. Copper, one of the principal conductor materials used in electrical cables, has entered record territory. London Metal Exchange official prices placed copper around US$14,500 per tonne in mid August. LME cash copper reached record levels during August after supply concerns intensified across an already tight physical market.

The price increase provides context for CAFCA’s 36% rise in year to date raw material costs. Global copper supply has become increasingly sensitive to policy intervention and inventory movements. The Democratic Republic of Congo introduced another restriction on copper and cobalt concentrate exports in August. The immediate global supply impact may remain limited because the DRC exports most of its copper in refined form, yet the announcement pushed LME copper higher and exposed the lack of spare material in the system. LME stocks had already fallen from about 401,000 tonnes in early May to 214,550 tonnes by 11 August.

Demand is reinforcing that pressure. Copper consumption is increasingly tied to power grids, renewable energy, electric transport and data centres. BHP says record copper prices have already turned the metal into its largest earnings contributor, with the miner planning substantial additional production through 2035 as electricity and digital infrastructure expand.

For CAFCA, the transmission works in both directions. Higher investment in electricity, mining, solar generation, housing and industrial projects increases demand for cables. The same global investment cycle lifts the price of the copper required to manufacture those cables.

Zimbabwe currently provides a supportive demand environment. July ZiG inflation stood at 3.2% year on year and monthly inflation was 0.1%. The Reserve Bank has maintained a relatively stable exchange rate environment, reducing some of the pricing volatility that previously complicated procurement and customer contracting.

Investment in mining and infrastructure adds another source of cable demand. Zimbabwe is pursuing new mining, processing, rail, road and power projects, including discussions around resource backed infrastructure funding. These projects increase the requirement for power distribution, substations, industrial cabling and electrical connections across productive sectors.

CAFCA’s sales mix already shows where the immediate growth is being captured. Local volumes increased 21% against export growth of 8%. Domestic productive investment is therefore carrying the stronger expansion.

The company now faces a pricing discipline test. Revenue growth of 31% exceeded year to date volume growth of 20%, showing that pricing adjustments are already contributing meaningfully to sales growth. Raw material costs increased 36%, placing continued pressure on the amount of copper inflation that must be recovered through selling prices, procurement efficiency and manufacturing utilisation.

The 147% profit before tax increase shows that CAFCA has so far converted higher throughput into stronger earnings even with escalating input costs. Maintaining that conversion becomes harder if copper remains around current record levels.

Recycling provides one operational lever. CAFCA’s ability to recover copper and aluminium from decommissioned cables can supplement virgin material procurement and reduce part of its exposure to imported conductor costs. The scale of that protection will be determined by the availability and economics of recyclable material.

The outlook remains favourable for physical demand. Zimbabwe’s mining, power, construction and industrial investment pipeline supports local cable consumption. Export growth adds another market beyond domestic projects.

Copper sets the principal external risk. Prices around US$14,500 per tonne leave CAFCA operating with a considerably higher working capital requirement for each tonne of conductor material purchased. Continued price escalation would require faster customer repricing and stronger cash management. A correction in copper would provide immediate procurement relief and improve the economics of the current volume growth.

CAFCA enters the final quarter with strong operating momentum. The next measure is the relationship between volumes, raw material costs and profit growth. Sustaining double digit volume expansion together with profit growth ahead of revenue would establish that higher factory utilisation is continuing to absorb copper inflation. A narrowing between revenue and raw material cost growth would strengthen that position further.

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