HARARE, March 28 (The Source) – Agro industrial group Zimplow narrowed its losses by half to $2,5 million from $4,8 million in the prior year after cutting operating costs to offset a revenue decline, chairman Thomas Chataika said on Tuesday.
The group’s revenue decreased by 21 percent from $30,5 million in the previous year to $24,2 million, after failing to recover from a poor first half performance.Turnover for the second half was double the first half at $15,9 million compared to $8,3 million.
Chataika said notwithstanding the slump in revenue, operating loss decreased more than half from $5,4 in the preceding year to $2,58 million on the back of cost containment measures and restructuring initiatives undertaken in the previous year and early 2016.
Operating costs reduced by 42 percent to $10 million from $14,9 million previously on the back of a 33 percent decline in administrative expenses to $6,9 million.
Chataika applauded the central bank for supporting the group in currency allocation to import certain products required in their operations.
Total assets fell from $39 million in the previous year to $34,5 million.
The Mealie Brand unit saw a 45 percent increase in plough sales volumes on prior year as local sales rose 10 percent while exports sales increased by 50 percent driven by a new branch in Zambia.
“Exports were buoyed by the opening of the Zambian Branch in July 2016 which enabled the MB200 plough to claw back market share,” said Chataika in a statement.
Farmec recorded a 55 percent decline in tractor sales while the Powermec unit saw a decline in generator sales which fell by 51 percent relative to prior year due to stable grid power as well as low consumer disposable incomes.
Chataika said the group has prioritised reduction of debt across its operations and as a result bank borrowings fell 82 percent from $11,9 million in the previous year to $2,1 million.
The group expects a boost in farmers’ buying power following a ‘promising’ 2016/17 rainfall season.
“As the business with a high gearing to agriculture this is very positive for us and we are already seeing material jump in turnover and margins in the first two months of the new financial year,” Chataika said.