HARARE, September 7 (The Source) – Zimbabwe Stock Exchange-listed agricultural concern, Zimplow, says the just-ended farming season ate into its bottom line, with the firm’s loss position worsening to $1,85 million loss in the half year to June compared to the $1,73 million registered over the same period last year.
Chairman, Zivanayi Rusike, on Monday said Zimplow’s revenue declined by 11 percent in the six months to June this year to $11,9 million compared to $13,3 million last year.
“The agricultural units recorded a 24 percent decrease on turnover as a result of a massive downturn at Mealie Brand division. Margins on agricultural units were heavily affected by the poor performance of its flagship Mealie Brand and price wars amongst the players in the tractor industry,” he said.
In the period under review, the group’s net operating costs were down by seven percent, but Rusike said this could have been 14 percent had it not been for provisions for doubtful debts and obsolete stock included in net operating expenses.
Rusike noted that the disappointing performance has been a result of a combination of factors including the erratic 2014/ 2015 rainy season, poor preparation by grain farmers because of lack of funding.
GMB did not pay some farmers and while some where paid late.
The season was also characterised by low tobacco prices and while volumes also fell from the prior year. Cotton output also fell and was characterised by low prices.
Government recently revised this year’s agricultural growth from 3,4 percent growth to a negative 8,2 percent due to harsh weather conditions, high cost of funding and lack of farming inputs.
Rusike said post half year, the group has embarked on another cost rationalisation exercise.
“The significance of losses recorded at Mealie Brand and additional provision resulted in an operating loss for the year that is at the same levels as prior year,” he said.
Rusike added that the group successfully raised $5 million in the period under review which was applied together with the proceeds from property sales towards the retirement of its $8,4 million short-term debt.
“There are other initiatives being undertaken by the group to continue to eliminate and reduce debt,” he said.