Harare – ART Corporation reported a 135 percent increase in profit after tax in the half year period ended 31 March 2019, to ZWL$8.7 million from ZWL$3.7 million recorded in the same period last year, as total revenue rose 34 percent to ZWL$29.6 million from ZWL$22.1 million.
In a statement accompanying the financial results, ART chairman Thomas Wushe said “all the Group’s business units were profitable in the period.”
All was not rosy however, as the company’s local sales volumes declined as consumer purchasing power was eroded by inflation.
Export sales volumes in the region increased by 30 percent as the Group’s focus on foreign currency generation yielded positive results.
The battery business segment recorded a 37 percent increase in revenue in the local market albeit a 15 percent decrease in volumes largely attributed to the restrained trading in October 2018 and January 2019.
Chloride Zambia volumes increased by 30 percent on the back of an aggressive selling effort.
“Overall, the battery business achieved an operating profit of ZWL$2.8 million,” Wushe said.
The Paper division achieved revenue growth to ZWL$6.7 million, a 69 percent increase from prior year. However, volumes at the Mill were 4 percent lower as a result of reduced plant availability owing to intermittent power supply.
Export volumes increased by 15 percent, while operating profit for the division increased to ZWL$1.5 from ZWL$0.3 million in 2018 on the back of improved machine efficiencies and improved raw material quality.
Softex recorded 85 percent increase in revenue to ZWL$8.7 million, however, volumes were affected by the shortage of foreign currency to import virgin tissues.
Hygiene and femcare volumes increased by 17 percent and 10 percent respectively due to improved product availability and the introduction of new lines.
Eversharp recorded a decline in profitability to $0.1 million compared to $0.9 million in 2018.
Wushe said the business was adversely affected by the disruption of trading during the back to school period. Volumes reduced by 33 percent, while revenues increased to ZWL$5.3 million from ZWL$3.5 million in 2018.
Timber demand remained firm achieving 147 percent increase in operating profit to $0.4 million.
On the outlook, Wushe said the Group will continue to focus on exports while prioritising value preservation as the challenges in the economic environment are expected to persist.
“The improved efficiencies in the retooling of the business will enable the business to take opportunities in new product lines in order to broaden the customer base”, Wushe said.
Equity Axis News
Raynold Mhotseka is a Journalism and Media Studies student at the University of Zimbabwe. He serves as a news writer at financial research firm, Equity Axis where he is currently on attachment.