Powermec weighs down Zimplow
RYAN CHIGOCHE
Listed agro-industrial group, Zimplow Holdings, profit dropped to ZWL$230.6m for the year to December 31, 2021 from ZW$451.4m in the prior comparative period, weighed down by the group’s power solutions division, Business Times can report.
The performance of Powermec, which provides power solutions, was negatively affected by constrained demand. Revenue for Powermec dropped 23%.
Volumes dropped 20% during the reviewed period as power consumption switched from generators to the grid resulting in operating profit reducing by 50%.
However, other units – Farmec, Barzem, CT Bolts and Mealiebrand—delivered stellar performance.
Consequently, revenues for Zimplow, grew 17% in the reviewed period to ZWL$2.7bn from ZWL$2.3bn in prior period, driven by growth in volumes across all units.
Total assets stood at ZWL$2.8bn during the reviewed period from ZWL$2.3bn in 2019.
“….Demand for power solutions were more linked to prime power requirements rather than standby power as in the prior year where the grid had constant power outages. Product mix for 2020 was skewed towards the medium sized range sets compared to the smaller sized sets in the prior year. Volumes were down compared to prior year as power consumption switched from generators to the grid resulting in operating profit reducing by 50%,” Zimplow chairman Godfrey Manhambara said.
Barzem reported an improved performance. Revenue for Barzem grew by 47% while its operating profit grew 8%, driven by a fourfold growth in whole goods volumes.
“We are encouraged by the effort to have Barzem as the dominant supplier of earthmoving equipment. We continue to work together with our partners, Barloworld, to smoothen the supply chain and increase equipment uptake of CAT equipment in Zimbabwe,” Manhambara said.
Revenues at Farmec grew 13% driven by the tractor and implements volumes growth of 30% and 37% respectively against prior year.
Another unit, Mealiebrand, reported a 20% growth in revenues despite a slow start to the financial year.
The business unit maintained its position as the significant driver of the groups’ bottom line with a 33% contribution despite the reduction in export volumes.
CT Bolts recorded a 180% growth in revenue to close the year on ZWL$93m.
