Zimplow profit up 920 percent

AGRICULTURE and mining implements concern, Zimplow’s profit for the half year to June 30, 2019, surged 920 percent to $15 million from $1 million recorded in the same period last year spurred by exports.

Although demand from the tobacco farmers did not come in at the same level as last year, Zimplow indicated overall performance from across the board was generally positive while exports also came in firm compared to same prior year period.

“Owing to a good working capital posture and sales mix, the group benefitted from a tailwind on its exports sales,” said Zimplow in a statement accompanying the group’s financials.

At $6 million, other income came in 2 469 percent above prior year comparable period. Revenue for the six months under review jumped 78 percent to $36 million.

Administrative expenses doubled to $3 million in line with inflationary pressures. Total assets grew 47 percent to $70 million.

On divisional performance, Mealie Brand contributed significantly to the group’s profitability. Its revenue tripled to $10 million driven by a strong sales mix which was 56 percent exports and 44 percent local.

The business recorded a profit before tax of $9,9 million and exports enabled it to have exchange gains on debtors and receipts.

At Farmec, revenues came in 78 percent higher to $13,7 million after 44 tractors and 130 implements were sold over the period under review.

CT Bolts recorded a 77 percent increase in revenue to $1,5 million and a before tax profit of $1,1 million. There was a change in sales mix with mild steel bolts down 58 percent while high tensible bolts volumes doubled.

For Powermec, the business was driven by the obtaining electricity shortages as gensets sold doubled to 44 compared to 22 in the comparable period. Revenue surged 235 percent to $3,5 million with profit before tax at $1,6 million.

Service hours sold increased 21 percent to 1 426. Zimplow indicated demand remained strong and the group would maintain efforts to ensure sufficient stocks.

On the downside was Barzen which had a depressed performance during the period with $7,4 million revenue achieved. Whole goods sold went down 74 percent while parts sold while parts sold were up 46 percent.

Management is upbeat of a good performance from the agriculture equipment business on the back of the projected normal 2019/20 rain season.

“We however remain cautious in our working capital posture to ensure we tie up appropriate capital against anticipated demand,” said Zimplow.

The group declared an interim dividend of 1,47 cents per share.