Zim­plow raises $1,5 mil­lion

Chronicle (Zimbabwe) - - Business Chronicle - Oliver Kazunga Se­nior Busi­ness Re­porter

ZIM­PLOW Hold­ings has raised $1,5 mil­lion from the dis­posal of non-core prop­er­ties to re­tire short-term debt.

The group’s chief ex­ec­u­tive of­fi­cer, Mr Mark Hulett re­vealed this in a state­ment ac­com­pa­ny­ing the group’s unau­dited state­ments for the half year ended June 30, 2016.

Zim­plow whose sub­sidiaries are Mealie Brand, Farmec, Pow­er­mec, Barzem and CT Bolts an­nounced in June that it had also re­duced its bor­row­ings to $3,2 mil­lion from $4,3 mil­lion recorded dur­ing the year ended De­cem­ber 31, 2015.

In the half year to June 30, 2015 bor­row­ings stood at $11,5 mil­lion.

“The group suc­cess­fully raised $1,5 mil­lion net process from the dis­posal of non-core prop­er­ties in or­der to re­tire short-term debt. The busi­ness con­tin­ues to rely on its bal­ance sheet to re-fi­nance the busi­ness as it seeks to re­duce bor­row­ings,” said Hulett.

De­spite the con­tin­ued de­pressed trad­ing en­vi­ron­ment, the group was fo­cused on in­ter­nal re-or­gan­i­sa­tion cou­pled with cost con­trol, cash man­age­ment and the re­duc­tion of bor­row­ings.

Mr Hulett said the in­ter­nal re­struc­tur­ing was now com­plete.

He said the El Nino in­duced drought neg­a­tively im­pacted on their sales.

“Mealie Brand ex­pe­ri­enced a slow start to the year as most of the lo­cal dis­trib­u­tors started the year with roll over stocks from the pre­vi­ous year.

“Ex­port per­for­mance was also sub­dued due to weak de­mand from tra­di­tional re­gional mar­kets as their cur­ren­cies de­val­ued against the United States dol­lar,” said Mr Hulett.

He said timely price sup­port ini­tia­tives by Mealie Brand to the ma­jor dis­trib­u­tors ahead of the to­bacco sea­son re­stored com­pet­i­tive­ness of the prod­ucts, de­con­gested the dis­tri­bu­tion chain and gen­er­ated the much needed cash as roll over stocks from 2015 be­gan to be liq­ui­dated in the sec­ond quar­ter.

“Mar­gins were how­ever un­der pres­sure as the av­er­age unit price dropped by 15 per­cent. Vol­umes of ploughs sold on the lo­cal mar­ket in­creased by 20 per­cent and to­tal im­ple­ment vol­umes in­creased by 15 per­cent com­pared to the pre­vi­ous year the same pe­riod un­der re­view.”

Dur­ing the pe­riod un­der re­view, ex­port vol­umes sig­nif­i­cantly dropped as there was no off take from the tra­di­tional mar­kets.

“Fo­cus for the sec­ond half will be on con­sol­i­dat­ing lo­cal dis­tri­bu­tion through in­creased mar­ket pres­ence and grow­ing the ex­port mar­ket start­ing off with the open­ing of a branch in Zam­bia in the third quar­ter. The busi­ness unit is also set to re-en­ter the East African mar­ket in the third quar­ter,” said Mr Hulett.

On Farmec, he said, the trac­tor busi­ness unit was not spared from the ef­fect of drought con­di­tions as trac­tor vol­umes de­clined by 37 per­cent com­pared to the same pe­riod in 2015.

The vol­umes for gen­er­a­tors at Pow­er­mec went down by 52 per­cent com­pared to the same pe­riod last year.

“The sta­bil­ity ex­pe­ri­enced in elec­tric­ity sup­ply on the na­tional grid caused this drop in vol­umes,” he said.

Vol­umes for earth­mov­ing equip­ment at Barzem for the first half of the year were 50 per­cent of the same pe­riod in 2015 while power units were 28 per­cent of last year.

Sales of power gen­er­a­tion at Barzem re­mained sup­pressed due to the over­all im­proved elec­tric­ity sup­ply in the coun­try.

At CT Bolts, Mr Hulett said the vol­umes up­take from all key sec­tors was be­low pro­jec­tions and even prior year, how­ever, the busi­ness showed re­silience with turnover only be­ing down 15 per­cent com­pared to the same pe­riod last year. — @ okazunga

Newspapers in English

Newspapers from Zimbabwe

© PressReader. All rights reserved.