Amalgamated Regional Trading (ART) revenue was up 39% in the quarter to December 31,2022, driven by increased sales, the company has said.
“Revenue increased by 39% in inflation adjusted terms from prior year driven by the increased local battery and pen sales despite the intermittent supply gaps arising from outages in power and water supplies,” group secretary Abisai Chingwecha said in a trading update.
Volumes for the period declined overall by 3% compared to last year. Profitability was impacted by reduced plant availability resulting in significant under recoveries particularly at the Mill, the company said.
Chingwecha said margins remained strong as costs have generally been recovered from customers.
He said the increasing hard currency sales “continue to provide a hedge to limit the impact of the foreign currency movements”.
Chingwecha said the overall volumes for batteries were 1% lower than prior year whilst export volumes fell by 13% on account of product shortages. The division was cushioned by the greater inventory holding levels which had been put in place in response to the global supply chain disruptions, he said.
Volumes in the paper division decreased by 10% compared to last year as the anticipated efficiency improvements from the recapitalisation programme were delayed, the company said.
The Eversharp division bucked the trend as volumes increased by 5% from last year. “Opportunities to meet increased local demand were lost due to delays in receiving imported raw materials in December. Export orders could not be met. The retooling of the division which had been held back was completed in December,” Chingwecha said.
Timber volumes for Mutare Estates declined by 29% during the period as focus remained on sustainability. Value addition and seedling projects enabled the division to maintain its revenues and profitability.
In the outlook, ART says the environment will remain complex and challenging as measures to eliminate distortions, stabilise the local currency and tame inflation are maintained with the group focusing on value preservation, cost containment and operational efficiencies.
“We remain wary of the risk posed by short term borrowings and are working to refinance these with suitable facilities. The elimination of local currency borrowings in December has helped to ease pressure on operations. The improved power supply will enable the optimisation of the paper projects,” Chingwecha said.