Harare – Diversified construction, infrastructure and agricultural equipment manufacturer and distributor, Zimplow Holdings reported a 78% increase in revenue for the 6 months ended 30 June 2019 to ZWL$36.2 million, up from ZWL$20.3 million in the first half of 2018 on the back of an overall positive performance across all segments.
The group achieved profit after tax of $15.3 million in the period under review, which is an increase of 854% from $1.6 million recorded in the same period last year.
“Owing to a good working capital posture and sales mix the group benefited from a tailwind on its exports sales,” Group Chairman Thomas Chatakaita said in a statement accompanying the Group’s financial results.
Zimplow operates through five divisions, namely, Barzem, Mealie Brand, CT Bolts, Powermec and Farmec.
Mealie Brand unit revenues tripled from $3.3 million to $10.3 million mainly due to a sales mix which was 56% exports and 44% local.
“Export sales enabled the division to have exchange gains on its debtors and receipts. The business achieved a profit before tax figure of $9.9 million,” Chatakaita said.
Powermec benefited from the ongoing electricity shortages with gensets sold doubling from 22 in the prior year to 44 in the period under review.
Revenue scaled up 235% to $3.4 million with profit before tax coming in at $1.6 million.
“The demand pipeline remains strong and ongoing efforts are being made to ensure that we carry sufficient stocks on hand,” Chatakaita said.
In addition, CT Bolts revenues went up 77% to $1.5 million whilst profit before tax came in at $1.1 million.
However, the unit recorded a change in the sales mix with mild steel bolts down 58% while high tensile bolts volumes doubled.
Barzem had a depressed performance during the period under review with revenue and profit before tax coming in at $7.4 million and $1.7 million respectively.
Whole goods sold were down 74% on last year while parts sold were up 46%.
On the outlook, Chatakaita said the anticipation towards a normal 2019/20 rain season will be positive for demand for the Group’s agriculture equipment business.
“We however remain cautious in our working capital posture to ensure we tie up appropriate capital against anticipated demand,” he said.
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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. He can be contacted through the following email links, firstname.lastname@example.org and email@example.com.