Harare – Amalgamated Regional Trading (ART) revenue for the year ended September 30, 2018 increased by 40 percent to close at $46.9 million compared to $33.5 million as a result of increased demand, improved production output in battery business and price movements against the backdrop of expansionary fiscal and monetary policies.
The Group said gross margins decreased by 3 percentage points to 39 percent as a result of raw material cost increases in the second half of the year across the business units.
In the period under review, the Group said the focus on exports also diluted margins as penetration pricing strategies were implemented in the regional market.
An operating profit of $7.3 million was achieved compared to $5 million in 2017 which is a 46 percent increase.
During the period under review, the Group said it strengthened its balance sheet from improved profitability and managed to significantly improve its net asset position to $1.4 million from a net liability to $4.8 million in the prior year.
Capital expenditure for the year amounted to $2.2 million whilst cash generated from operations increased by 55 percent to $5.2 million and was applied towards creditors and loan repayments.
Going forward, the Group said the economic challenges in the country are likely to persist with it facing potential interest penalties on its foreign trade facilities due to payment delays.
However, the Group said export development strategies initiated during the year are expected to increase export revenue to enable it to sustain its operations.
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