LIVINGSTONE MARUFU
Listed diversified group, Amalgamated Regional Trading Holdings Limited (ART) wants to expand its footprint in the Southern African region as part of efforts to earn foreign currency which will help sustain local operations.
ART, which operates a paper mill, a waste collection company, stationery and batteries units, among other products has presence in Zambia, Malawi and South Africa.
But the company said it would benefit more from opportunities in other countries in the region.
Board chairman, Thomas Wushe, said although the establishment of the foreign exchange auction has helped the group to access forex from the formal market, improving the group’s operations, its units were affected by inconsistent power supply in the first half of the year and Covid-19 related trade and supply disruptions in the second half of the year.
“The measures taken to stabilise the exchange rate and improve foreign currency availability by the fiscal and monetary authorities will improve trading conditions and enable the business to continue with its plans to seek new opportunities and enhance capacity to meet demand in the region,” Wushe said.
Volumes for the group increased by 13% for the year to September 30,2020.
The group’s revenues increased by 28% to ZWL$2,6bn during the 2020 period fromZWL$2.03bn in prior year due to the increased volumes and inflation induced price adjustments.
Profit for the year, however, went down 29% to ZWL$541.8m during the year from ZWL$761.3m recorded last year due to lockdown restrictions put in place to combat the spread of Covid-19.
Gross margins stood at 52% as prices were increased in line with movements in costs of raw materials and labour while operational expenditure increased by 18% compared to the prior year.
The group recorded significant fair value losses on biological assets and investment property of ZWL$218m and ZWL$173m respectively owing to reductions in real market values during the period.
Capital expenditure was limited to critical maintenance projects amounting to ZWL$295m.
The funding of key raw materials remains a priority given the constrained cashflows.
The group generated sufficient cash to support operations and currently has adequate key raw material facilities to trade sustainably in the year ahead.
Wushe said the batteries business segment continued to drive the group’s performance with volumes increasing by 17% during the year.
The paper mill production volumes improved marginally towards year end on the back of improved power and raw materials, however, demand remained weak. But volumes fell by 37% compared to the same period last year.
Softex tissue volumes declined by 20% from prior year because of reduced disposable incomes and inconsistent supply of cheaper recycled bulk tissue with the contribution of non-tissue lines increased to 18% of total sales as the product range was widened.
Eversharp volumes were 33% lower than prior year as schools remained closed during the period with production resuming towards the end of the period in preparation for the re-opening of schools. Timber sales volumes for the year increased by 37% as a result of improved milling efficiencies and firm demand.
ART operations at the estates remained largely unaffected and there were no major fire incidents during the period.
