• ART reversed a weak first quarter to deliver 5% growth in group sales volumes during the half year
• Revenue rose 6% to approximately US$14.3 million
• The company continued strengthening the balance sheet through debt reduction, property disposals and tighter working capital management

Harare - The Zimbabwe Stock Exchange-listed diversified group, Amalgamated Regional Trading Holdings, recorded a 5% increase in overall sales volumes for the half year ended 31 March 2026, reversing the weak start recorded in the first quarter when group volumes fell 1%.

Revenue increased 6% to ZWG362.4 million from ZWG343.2 million, while gross profit rose to ZWG127.8 million from ZWG117.5 million. Gross margin improved to 35%, supported by cost control, improved pricing discipline and productivity gains across the operating units.

The key development is that the volume recovery was broad-based. Batteries Zimbabwe, Eversharp and Mutare Estates all recorded higher volumes despite tight liquidity, import competition, high utility costs and intermittent power supply.

The result shows that ART's restructuring is beginning to move from balance sheet repair into operating recovery.

The group reported profit after tax of ZWG14.2 million from continuing operations, up from ZWG9.6 million in the comparative period. Total profit for the period was ZWG10.9 million after a ZWG3.3 million loss from discontinued operations.

Reported performance was affected by a ZWG11.9 million loss on disposal of non-current assets and ZWG1.9 million in retrenchment costs. These charges pushed the group into a ZWG7.0 million loss before tax, although underlying operating profit before fair value adjustments and impairments improved to ZWG9.6 million from ZWG9.0 million.

The disposal loss relates to Mutare Mill properties, which management said formed part of a broader programme to reduce legacy obligations. The transaction weakened reported earnings in the short term but improves liquidity and removes future holding and maintenance costs.

Batteries Zimbabwe delivered a stronger second-quarter performance and returned to profitability. Local volumes increased 3%, while export volumes recovered 10%. Production and sales remained below target because of working capital constraints and supply disruptions, meaning the division still has unutilised demand capacity.

The battery unit remains strategically important because regional demand for energy storage continues to rise. ART's improved product range and progress in resolving maintenance-free and industrial battery constraints provide scope for stronger second-half output if working capital improves.

Eversharp volumes increased 13% despite competition from imported and counterfeit products. The division benefited from pricing discipline and continued uptake of the EV10 pen range. New assembly equipment is expected before the back-to-school season, which should reduce repair costs and improve production efficiency.

Mutare Estates remained the strongest cash-generating unit. Volumes increased 31%, supported by firm demand for structural timber, higher milling productivity, operational efficiencies and disciplined pricing. The unit continues to provide important cash flow support to the wider group.

ART also reduced borrowings during the period. Total borrowings declined to ZWG34.1 million from ZWG44.5 million at September 2025, following repayment of short-term facilities. The average cost of borrowings remains high at 15%, reinforcing management's focus on cash preservation and debt reduction.

The board did not declare an interim dividend, citing balance sheet strengthening, debt reduction and cash preservation. That decision is consistent with the group's current operating priorities.

The main constraint remains capital availability. Demand is recovering across core businesses, but production is still being limited by working capital shortages, high finance costs and supply disruptions. The next phase of recovery depends on converting higher volumes into stronger cash generation and sustainable earnings growth.

ART enters the second half with improving momentum, lower borrowings and stronger divisional performance. The turnaround is not complete, but the half-year results show measurable progress in volumes, margins and balance sheet discipline.

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