- Production Decline: Production volumes contracted by 5% year-over-year
- Sales and Revenue Impact: Sales volumes decreased by 4% to 4,800 tons, resulting in a 10% revenue drop to $14.522 million
- Solar Power Initiative: Completion of a 50,000 kWh/month solar power plant expected to generate significant electricity cost savings and offset fuel expenses
Harare- Proplastics, a premier plastics products manufacturer and distributor, reported subdued year-to-date (YTD) results for the nine months ended September 30, 2024. The company experienced a 5% contraction in production volumes, consistent with half-year (HY) trends.
In the first half of 2024, Proplastics posted a $72,000 net loss, accompanied by a 5% increase in gearing ratio.
Operationally during the period under review, a 5% decline in production volumes yielded 4,800 tons in sales, representing a 4% year-over-year (YoY) decrease.
Consequently, revenue declined 10% to $14.522 million, aligning with reduced sales volumes.
The company's performance was significantly impacted by macro-economic factors, particularly the prolonged drought - the worst in 40 years. This led to decreased consumer spending, while government allocations prioritized drought relief, stifling product profitability.
Despite these challenges, Proplastics anticipates benefits from increased rainfall in Q4.
However, this optimism is tempered by subpar precipitation in October and November, with little rainfall expected in December.
On a positive note, the completion of a solar plant generating 50,000 kWh of energy monthly is expected to generate electricity cost savings and offset fuel expenses.
Given the current market conditions, Proplastics needs to prioritize cost management over profitability in FY 2024.
Effective cost management will be crucial in ensuring continued competitiveness and sustainability.
The solar plant initiative exemplifies Proplastics' commitment to sustainability and cost efficiency. By reducing reliance on non-renewable energy sources, the company will minimize its environmental footprint while enhancing its bottom line.
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