- Volumes surges 52%
- Revenue up 39%
- Acquisition of Nampak’s 50% shareholding in Softex complete
Harare - Zimbabwe Stock Exchange listed paper and battery manufacturer, ART Holdings Limited has reported a 52% overall volumes growth for the third quarter ended 30 June 2021 compared to the same period last year on the back of improved economic activity which drove volumes recovery across all divisions.
Revenue for the period scaled up by 39% compared to prior year despite the impact posed by COVID-19 restrictions.
“The pressure on margins persisted during the period necessitating increased focus on cost containment and efficiency improvements,” the group’s Chief Executive Officer, Milton Macheka said in a statement accompanying the trading update.
Year to date sales volumes were 15% firmer ahead of the same comparable period last year, while export earnings for the quarter were marginally ahead of the prior year in the same period driven by a recovery in paper export volumes in the region.
Meanwhile, the acquisition of Nampak’s 50% shareholding in Softex was completed in May this year and all conditions precedent were met with the company now focused on streamlining and capitalizing the paper business silo.
“The Group has prioritized the retooling of the paper chain with the prevailing global and regional overcapacity in the industry creating a window of opportunity to replace antiquated equipment,” the chief executive officer said.
Volumes for the battery division increased by 37% during the period ahead of the comparable quarter last year.
This growth was propelled by the benefits of the division’s capitalisation program due to improved product availability across most product lines.
However, battery export volumes were maintained at prior year levels.
Paper maker segments of Kadoma Paper Mills, National Waste Collections and Softex volumes grew by 11% during the quarter under review compared to the prior year during the same period.
The moderate increase was driven by the delay in payments from the foreign currency auction coupled with logistical and raw material supply constraints necessitated commercial downtime with major repercussions on operating efficiencies, fixed cost absorption and profitability.
Zimbabwe’s leading manufacturer of ball point pens, Eversharp recorded volumes increase of 255% during the period compared to the same period last year.
Significant increase in volumes were due to limited trading necessitated by hard lockdown measures imposed last year that hindered production.
Despite the continued uncertainty of the school calendar due to restrictive COVID-19 lockdown measures, Eversharp business continued to breakeven with improved volumes across the market.
Timber volumes surged 27% during the period under review ahead of the same period last year propelled by a firm timber demand.
As a going concern in the foreseeable future, the Group has instituted strong cost discipline, tight working capital management and remains solvent, with sufficient resources.
The company still believes in the underlying strength of its core paper business segments and the capital expenditure commitments taken, will ensure recovery when fully implemented.
Equity Axis News.
