The group had previously noted a shift in consumer dynamics in favour of smaller handbags and therefore smaller skins due to a defensive Asian market. Skins 40cm/+ size were rejected regardless of quality and were/will be sold at reduced prices negatively impacting Padenga. Crocodile skin sales volumes for the period under review remained firm at 39,936 skins (FY20 43,254). No export meat sales were made due to COVID-19 induced restrictions on sales of exotic meat across the globe. Revenue for the crocodile business was down 9% from US$27.28mn to US$24.70mn. The business contributed 31% to Padenga’s total revenue. Fair value adjustment fell as the larger crocodile skins in inventory are expected to fetch lower prices. Resultantly, the crocodile business’ loss for the period was US$3.41mn from a profit of US$1.38mn in FY20. Looking at the Alligator Segment; volume of skins sold was down 47% with the bulk being lower grade skins sold to best advantage. The Texas operation remained hamstrung by oversupply and reduced demand in the market for watch band size skins. The operation had been moving towards medium and large skin production because of improved margins in those size ranges but the shift to smaller skins that was also experienced by the crocodile business resulted in Tallow Creek having skins that could not be sold at viable prices. Revenue for the alligator business was down 40% from US$3.96mn to US$2.36mn (contributed 3% to Padenga’s total revenue). The segment’s profit for the period was US$0.82mn from a loss of US$4.56mn in FY20. Mining volumes were 35% above the comparable previous period driven by production from the newly commissioned Eureka mine and revised open pit mine plan at Pickstone. Dallaglio’s revenue came in at US$51.38mn (contributed 65% to Padenga’s revenue). The mining segment recorded a loss of US$4.41mn from a profit of US$5.15mn due to once of pre-operating expenses incurred at Eureka mine. Total revenue for Padenga was down 10%y/y from US$71.60mn to US$78.46mn. EBITDA for the combined business was down 36% from US$23.76mn to US$15.10mn. The group’s interest-bearing borrowings grew 103% y/y from US$16.91mn in FY20 to US$34.40mn as at FY21. Borrowings have increased primarily to capacitate the mining business. There was no dividend declared.
