- ART Holdings temporarily halted operations at its mill, triggering significant closure costs and impacting Q3 financial performance
- Decommissioning and optimisation of excess tissue-converting machinery is expected to restore profitability in the medium term
- Overall sales volumes fell 7% during the quarter; turnover declined 23% year-on-year
Harare - The temporary closure of the Kadoma mill plant by Amalgamated Regional Trading Holdings Limited (ART Holdings) has resulted in significant costs and adversely affected the Group’s third-quarter financial performance for the period ended 30 June 2025, according to the latest financial update.
The optimisation and decommissioning of excess tissue converting machinery is expected to restore profitability in the medium term.
The tissue machine was mothbolled in mid 2024 after operateing for over 40 years.
According to the company the market and environmental conditions have not improved sufficiently to support the mill’s viability, and the possibility of a permanent discontinuation is now under consideration with the company anticipating a potential partnership to be concluded by year-end.
‘’ Management anticipates that ongoing discussions with potential partners and key stakeholders will be concluded by year-end,’’ Chief Executive Office Milton Macheka said.
Overall sales volumes declined 7% during the quarter, while turnover fell 23% year-on-year to US$7.8 million, largely due to reduced export volumes and power-induced product shortages.
Export sales were particularly hard hit, plunging 32%, with margins further pressured by the reduction in the foreign currency retention threshold, a government policy that has eroded earnings from cross-border trade requiring 30% to converted to Zimbabwe dollars at the official exchange rate.
The Energy Storage division, which produces industrial and automotive batteries, recorded volumes 3% below the prior year.
This was due to persistent power challenges disrupting product availability, while cheap imports intensified competition and drove pricing pressure.
Rising lead costs and higher energy expenses further compressed margins.
Stationery and Paper unit struggled, with volumes sliding 18% as major retailers grappled with liquidity challenges despite the authorities’ efforts to clampdown on illicit imports to reduce counterfeit products and pricing distortions.
However ,Mutare Estates, the Group’s timber business, emerged as a strong performer, posting a 25% increase in sales volumes on the back of firm demand and improved milling efficiencies.
Looking ahead, the company remains optimistic betting on the firm demand in batteries and timber, operational improvements, and disciplined cost management.
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