PG Industries H1 loss widens to $3,9mln as sales plunge

PG Industries H1 loss widens to $3,9mln as sales plunge

HARARE, September 30 (The Source) – PG Industries Zimbabwe after tax loss widened to $3,9 million for the half year ended June 30, from $2,3 million during the same period last year due to working capital constraints.

Group net sales revenue plunged 39 percent to $10 million as all its units operated at sub-optimal levels attributed to “chronic” working capital challenges.

Overall, gross margins remained unchanged at 27 percent.

Its current liabilities at $22 million exceed current assets by $14 million.

“These conditions give rise to a material uncertainty that may cast significant doubt about the group’s ability to continue as a going concern and therefore may be unable to realise its assets and discharge its abilities in the ordinary course of business,” the company said in a statement accompany the results on Tuesday.

Net operating expenses declined 17 percent compared to last year due to the downsizing initiatives that the company started in prior periods and merger of back offices completed in the first quarter.

In March, the group entered into a scheme of arrangement with its creditors which is now awaiting approval of the High Court which should result in the restructuring of the company’s balance sheet.

On the outlook, the company said it had concluded centralisation of back offices and retrenchments resulting in “significant” savings in operating costs.

Interest bearing borrowings were reduced by $5,5 million to $8,1 million.

“This reduction was achieved through property/debt swaps and through utilisation of property disposal proceeds,” said PG.

The group accessed a $1,3 million three-year bank loan at the end of June and used the funds to acquire key stocks and raw materials.

It was part of the $3,5 million fundraising initiative approved by shareholders as part of the scheme of arrangement.

“The impact of this funding received will be felt in the second half of the year,” the company said.