LIVINGSTONE MARUFU
Listed diversified industrial group, Amalgamated Regional Trading (ART) reported a ZWL$453.5m loss in the half year to March 31, 2021 , down from a profit of ZWL$419.3m reported in prior comparative period owing to volatile exchange rates and the negative impact of Covid-19 pandemic.
“Gross margins declined to 39% from 50% as prices could not be aligned to input cost increases in the short-term. Operational expenditure increased by 67% compared to the prior year, causing the group’s operating profit to decrease by 8% to ZWL$219m in inflation adjusted terms compared to last year,” ART chairman Thomas Wushe said.
Revenues for the group, however, increased 14% during the reviewed period to ZWL$1.76bn from ZWL$1.54bn reported in the prior comparative period.
The overall volumes for the half-year to March 31 2021 increased by 15%, the company said.
The battery business registered a strong performance with volumes increasing by 22% due to consistent product availability and improved efficiencies following the commissioning of additional plastic injection machinery.
Wushe said export competitiveness faces risks associated with policy inconsistencies, volatile exchange rates and supply interruptions.
But the group remained adaptable and managed to increase export volumes by 13% compared to the same period last year, Wushe said.
Notwithstanding management’s cost containment initiatives, the paper divisions struggled to contain the rising input costs and recorded losses of ZWL$52m during the period under review.
Volumes at Softex Tissue declined by 14% compared to the prior year as demand weakened and competition from imports increased.
Eversharp was able to remain profitable as retailers started to stock up in preparation for the back-to-school period.
Cost containment initiatives were maintained.
Mutare Estates performed well as timber demand remained firm.
Wushe said the group successfully commissioned additional injection moulding machinery at its Chloride factory in February which improved efficiencies and significantly reduced imports.
The progressive improvement of the manufacturing equipment, the company said, will enable the battery business to respond, participate and gain from market developments and the attendant opportunities.
The company was not in a position to declare a dividend.
Going forward, the group said it will continue to seek opportunities to balance growth and broader representation in terms of products, markets and energy storage technologies.
