Gold glitters for Zimbabwean luxury crocodile skins supplier

Tawanda Karombo

Gold is glittering for Zimbabwean crocodile skin supplier, Padenga Holdings, as luxury markets reels from global economic uncertainty and a growing shift to bullion as a store of value.

Padenga diversified into gold mining in 2019 through the acquisition of Zimbabwe gold mining operations. Analysts said at the time that the diversification represented an “unusual pairing” but is “value accretive” through enhancement of forex earnings potential.

Now, the company is reaping the benefits of that diversification, with gold prices spiking to highest levels. Spot gold prices traded above $3 700 per ounce in early trade on Thursday.

For the half year to end June, gold Prices closed $3 264 per ounce for Padenga compared to $2 402 per ounce at the beginning of the year. This represents 36% increase over the period, with the upturn in the gold prices also complementing “sterling financial performance” at the company’s gold mining division, Dallaglio.

Padenga’s gold mining unit contributed 94% of the group’s revenues of $130.68 million which was 38% stronger compared to same period last year.

This was after Dallaglio produced 1 292kgs of gold in the first half year under review, 7% higher compared to the previous contrasting period attributable to stronger grades and higher plant recoveries.

In the prior contrasting period, Dallaglio accounted for 88% of Padenga’s overall revenues.

Half year profits before tax for the 2025 half year amounted to $41.31m, up 204% compared to the contrasting period. 

A turnover of $123.37m was achieved for Padenga’s gold operations, representing a 41% increase.

Earnings before interest, tax, depreciation and amortisation for the half-year sprung up 114% $49.14m, with cash generated from operations also leaping up 183% to $38.12m attributable to “continued investment in strategic growth and debt reduction” strategies.

Padenga is additionally investing in capital projects to further ramp up bullion production, with phase 3 of the underground project at its Pickstone mine “progressing according to schedule” as access to Level 10 was established during the period while development is targeting commissioning of the loading and hoisting infrastructure by the end of this year.

“In addition, Pickstone mine will embark on the addition of a pre-oxidation facility in the second half of the year,” said Padenga chairman Themba Sibanda.

“This facility will improve leachability of ore going into the Carbon-in-Leach (CIL) stage and enhance overall plant recovery. Procurement for the project will commence in Q3 and commissioning is targeted for Q1 2026.”

While the company is sinking capital investment into its gold mining assets, it is slowing down investment in its crocodile farming business as demand slows down.

Padenga, which supplies crocodile skins to international luxury brands, says it has reduced costs by reducing its crocodile farms from three to two.

Its less rosy prospects from the sale of crocodile skins, a business that was once brisk, are a consequence of a luxury industry that is facing a significant slowdown that has hit even top brands hard, according to McKinsey.

“For the first time since 2016 (excluding 2020), luxury value creation is expected to create less value than the previous year,” notes McKinsey in a recent report.

Several of the luxury industry’s growth-driving engines have stalled (and) price increases have reached a ceiling, and higher prices are negatively affecting demand from luxury consumers.”

In the first half period under review,sales of crocodile skins by Padenga slipped by 5% to 13,919 skins. Moreover, the company’s Ume Crocodile Farm operations have been discontinued “due to the challenging market conditions, that have resulted in reduced demand” for crocodile skins.

Apart from supplying crocodile skins to global luxury brands, Padenga also exports crocodile meat to Asian and other markets.

BUSINESS REPORT