Powerspeed Electrical Limited will ride on its resources to survive short term business disruptions amid an uncertain future which has made it difficult to predict the future performance of the group.
The consumer discretionary concern said in its quarterly results for the third quarter ended June 30 that the economic difficulties facing Zimbabwe have been exacerbated by the Covid-19 pandemic.
Powerspeed’s inflation adjusted revenue for the first quarter to June 2020 was sitting at ZWL$1,124,690 compared to ZWL$882,093 of the same period last year.
While revenue rose substantially in historical and inflation-adjusted terms, profitability remains difficult to assess because of the rapidly changing exchange rates and distorted indices, the company said.
“Zimbabwe has been through periods of extreme uncertainty in the past, however, we are possibly facing even greater uncertainties than ever before, which makes it extremely difficult to predict the future performance of the group,” said Powerspeed company secretary Martin Gurira in a statement accompanying financial results.
“The trading environment remains extremely difficult with regulation changes without notice or consideration of the consequences. This will have a negative impact on almost all businesses in Zimbabwe as consumer spending declines further.”
Gurira noted that travel restrictions have made it difficult for staff to travel to work and the company had to incur additional costs in transporting employees to work.
Despite these challenges, Powerspeed has been able to keep most of its operations operational to maintain customer service.
Gurira said volume throughput during the quarter under review has been erratic, as the national shutdown in April reduced throughput to almost zero for the greater part of the month.
Subsequently, volumes recovered, however, there have been substantial changes in product mix, he said.
Overall volumes were marginally higher than the same quarter last year due to increased market share in a number of product groups.
According to Gurira, margins continue to be under pressure while expenses are rising with inflation and devaluation.
“Based on the assessment of the balance sheet, we believe that we are continuing to build shareholder value in real terms,” he said.
Powerspeed is a leading supplier of electrical, hardware, building and home improvement products and services; trading through its own chain of hardware retail outlets known as Electrosales Hardware.
The company supplies electrical products and solutions to the painting, plumbing, electrical, building, hand and power tools, outdoor and gardening, and automotive industries in Zimbabwe.
Powerspeed Engineering is a subsidiary company involved in rewinding electric motors, supplying industrial fans and ducting for commercial and industrial applications, fabrication of non-standard steel products and structures, and commercial and industrial light fittings, heating elements, distribution boards and domestic irons.
The engineering division is the amalgamation of three leading industrial engineering companies; Airflo, Relmo and ELS.