Axia HY profit down 16pct

Axia HY profit down 16pct

HARARE, March 9 (The Source) – Axia Corporation’s after tax profit in the half-year period to December 31, 2016, dropped 16 percent to $7,8 million compared to $9,4 million in 2015, largely on increased operational costs.

Revenue at $119 million was 14 percent up on prior year’s $104 million, resulting in an operating profit of $11,154 million and a profit before tax of $10,690 million.

Chairman Luke Ngwerume said the company incurred additional overheads from the new head office structure.

Axia, an Innscor Africa spin-off, has TV Sales and Home, Transerv and Distribution Group Africa as its operating units. The units had mixed performances during the six month period. TV Sales & Home achieved a 54 percent growth in units sold resulting in 33 percent growth in revenue, largely spurred by growth in cash sales.

The instalment debtor’s book increased 12 percent over the comparative period and Ngwerume said the quality of the book remained good throughout the period.

“While the business has increased focus on locally manufactured good, foreign payments remain a challenge not only for the business imported products, but also for its local suppliers for their imported content,” said Ngwerume in a statement accompanying the results.

Transerv suffered a 7 percent decline in revenue, with the business affected by the supply of key stocks, particularly batteries in first quarter due to delays in obtaining import permits.

Distribution Group Africa Zimbabwe performed well despite facing similar challenges, recording a volume growth of 32 percent resulting in 23 percent growth in revenue.

“This was largely attributable to the acquisition of new distributorship agencies during the period,” Ngwerume said.

Distribution Group Africa Region endured a subdued performance, with turnover and operating profit declining 11 percent and 57 percent respectively from prior year.

Ngwerume said attributed this to harsh environments in Zambia and Malawi economies worsened  by weaker currencies and declining consumer disposable incomes.

Looking ahead, Ngwerume said the group expects to remain profitable.