NTS stays resilient despite headwinds
NATIONAL Tyre Services (NTS) performance for the third quarter to December 31, 2023 remained resilient with the company registering volume growth despite the obtaining challenging operating environment.
NTS experienced a host of challenges during the period under review including exchange rate volatility, which has a knock-on effect on price competitiveness in the market.
Adding to that, erratic utility supplies also weighed on operations. Unreliable power generation towards the end of the year adversely impacted turnaround time in NTS's retreading factories.
“The volatility of the foreign exchange rate continues to negatively impact price competitiveness in the market. Prices of goods and services increased towards the end of the reporting period due to high festive season demand,” said company secretary Mr Stewart Mandimika in a trading update for the quarter.
It was, however, not all gloom for the company according to Mr Mandimika, as Tyre sales volumes, for instance, recorded a jump during the quarter under review. From April 2023 to December 2023, NTS recorded a 15 percent increase in new tyre sales volumes compared to the same period last year. This surge in sales was further amplified in the third quarter of 2023, with new tyre sales volume growing by 19 percent compared to the same period in 2022. The surge in sales was attributed to NTS's strategic marketing initiatives aimed at enhancing brand visibility and capturing market share.
In addition to the robust growth in new tyre sales, NTS also witnessed an 11 percent increase in tyre service sales units during the period under review, compared to the third quarter of 2022.
Mr Mandimika attributed the growth to the rising demand for tyre services, fueled by the increased volume of new tyres sold by NTS.
However, amidst the positive performance, NTS also experienced declines in some segments. Retreading volumes in the third quarter of 2023 experienced a slight dip of 2 percent compared to the same period last year, primarily due to production disruptions caused by electricity challenges.
Nonetheless, NTS remained steadfast in its commitment to overcoming obstacles and delivering superior products and services to its customers.
Resultantly, overall volume performance for the year up to December 2023 showed resilience as it improved by 20 percent compared to the previous year. Mr Mandimika revealed this significant growth was largely supported by market-driven procurement of tyres, underscoring NTS's ability to adapt to evolving market dynamics and capitalize on emerging opportunities.
While the environment sremains challenging, the company is upbeat about the regulatory landscape, particularly with the introduction of new tax regulations by the Government aimed at enforcing compliance and fostering a level playing field in the market.
The company has also put in place measures for sustainability.
“National Tyre Services is focused on full business recovery premised on remodelling the business and continued implementation of a raft of cost-cutting measures introduced during the year,” said Mr Mandimika.