- The company posted an inflation-adjusted loss of ZWL 1.8 million
- Recorded net loss of ZWL 1.8 million compared to a profit of ZWL 110,723 in the comparative period
- Shareholders’ equity decreased by 8% to ZWL 20.9 million due to the net loss incurred
ZSE-listed National Tyre Services (NTS) has failed to declare a dividend in the half year ended 30 September 2019, as it indicates the need for additional cash resources to survive through the difficult operating environment.
In a statement accompanying the half year financials, company chairperson Rutenhuro Moyo said, “In view of the need for additional cash resources to run the business in this harsh economic environment, the Directors did not declare a dividend.”
Business operations in Zimbabwe have been hard pressed for the larger part of 2019, with the negative economic trends carrying over to 2020 largely characterised by inflationary pressures, foreign currency shortages, depreciating local currency and low disposable consumer incomes which have are crippling most business operations.
“The scarcity of foreign currency resulted in reduced stock holding. Consequently, the company posted an inflation-adjusted loss of ZWL 1.8 million for the six months ended 30 September 2019,” Moyo said.
Meanwhile, the inflation-adjusted revenue decreased by 15% to ZWL 31.4 million compared to the previously unaudited revenue position of ZWL 36.8 million.
“This was due to a decrease in sales volumes and reduced capacity utilisation. The company reported a net loss of ZWL 1.8 million for the period compared to a profit of ZWL 110,723 in the comparative period,” he said.
Shareholders’ equity decreased by 8% to ZWL 20.9 million due to the net loss incurred while total assets decreased by 13% from ZWL 36.6 million to ZWL 31.7 million mainly due to a decrease in current assets.
Moyo said the company remained solvent with total assets exceeding total liabilities by ZWL 20.9 million.
Retreading operations performed well during the period under review due to shifting production to match power availability as well as improved availability of raw materials from reliable suppliers.
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