BUSINESS REPORTER
Listed agro-industrial group, Zimplow Holdings’ top line jumped 67% to ZWL$1.66bn in the six months to June 30, 2021, from ZWL$991m reported in the prior comparative period due to a growth in volumes, Business Times can report.
Volumes across all units increased in the reviewed period driving revenue growth. Profit for the group, however, fell 21% to ZWL$228.3m from ZWL$289.5m reported in the prior comparative period due to high operating expenses which were incurred to maintain the staff during the height of the Covid -19 pandemic.
“The group took deliberate steps towards staff retention and capacity maintenance expenditures to drive the top line and access new markets, which drove operating expenses to be ahead of the prior year,” Zimplow chairman Godfrey Manhambara said.
He added; “The Group is encouraged by the growth in revenue and profitability in real terms as well as volumes, to which the Board and management based the interpretation of the financial performance for the period ended 30 June 2021.”
Operating expenses went up 85% to ZWL$452m in the period under review ZWL$244.8m during the comparable period last year due to expenses coming from administration expenses, selling and distribution expenses and other operating expenses.
Manhambara said despite the lockdowns exacerbated by the third wave of Covid-19 pandemic, the economic and trading environment has generally been stable during the period under review driven by a good season in the agricultural sector, firm global mineral pricing, and drive towards infrastructure projects and a fair access to foreign currency.
The group is encouraged by the growth in revenue and profitability in real terms as well as volumes, to which the board and management based the interpretation of the financial performance for the period ended June 30 2021.
The Farmec unit continued its growth trajectory with the revenue growing by 119% in real terms ahead of prior year being driven by tractor and implements volumes which went up by 133% and 77% against prior year respectively.
The unit’s after sales performance grew by 35% compared to prior year. The business continues to put effort to meet the growing demand of agricultural products following the 2020/21 agricultural season, which has been very positive.
The business unit achieved profitability growth of 92% in real terms.
The Mealie Brand business unit recorded volume growth in both local and export sales during the period under review compared to the same period last year.
Local and export implements volumes were 147% and 69% respectively ahead of prior year pushing revenue growth by 161% in real terms against prior year. In terms of profitability, the unit witnessed a growth of 748% in real terms. The Barzem unit managed to double volumes of earth moving equipment units sold to 14 compared to prior year. Parts revenue grew by 80% in real terms and service hours were 28% ahead of prior year. Overall, the business units’ revenues went up by 116% in real terms because of the drive towards performance by the Barzem team supported by renewed customer belief in the CAT product solutions. The business unit achieved a profitability growth of 88% in real terms.
CT Bolts recorded a 61% growth in revenue in real terms ahead of prior year and the key driver came from volume growth which went up by 58%. The unit will continue to focus on realigning its distribution channels and supply chain management.
Powermec was the only unit to record a drop in revenue where a 7% drop was recorded due to a 24% in generator unit sales. However, the improvement in after-sales performance by 11% against the prior year provided stability to the overall performance for the unit despite the impact of Covid-19.
Scanlink (Private) Limited and Tredcor Zimbabwe (Private) Limited are now 100% subsidiaries of Zimplow following the fulfillment of all conditions precedent in July 2021. Going forward, the company is buoyed by a firm order book and good leads in the construction and mining industries as well as a positive rainfall forecast for the 2021/22 agricultural season.
The group expects Covid-19 to persist in the foreseeable future and is therefore putting in place the risk management strategies to reduce the impact on staff, customers and communities.
