Zimplow positioned to sustain growth
DIVERSIFIED agro-concern, Zimplow Holdings says it is strategically positioned to sustain growth across all business units supported by a firm order book and good leads in the construction and mining industries as well as a positive rainfall forecast for the 2021/22 agricultural season.
The Zimbabwe Stock Exchange (ZSE) listed group manufactures and markets a diverse range of products for the construction, infrastructure and agricultural sectors in Zimbabwe. It also manufactures and distributes metal fasteners for the mining, construction and agricultural sector, and has interests in property management and leasing.
Its farming division consists of three business units; Mealie-Brand, Farmec and Afritrac and the mining and infrastructure division that manufactures and distributes mining equipment, spare parts and related products through four divisions; Barzem, CT Bolts and Farmec.
“The group managed to deliver a solid performance to achieve business growth during the half year period to June 30, 2021. Volumes across all units were up against prior year driving revenue growth by 67 percent to $$1,66 billion in inflation-adjusted terms ahead of last year,” Mr Godfrey Manhambara, the group’s chairman, said in a statement of the financials.
Mr Manhambara said during the period under review, despite the lockdowns exacerbated by the third wave of the Covid-19 pandemic, the economic and trading environment was generally stable driven by a good season in the agricultural sector, firm global mineral pricing, drive towards infrastructure projects and a fair access to foreign currency.
In terms of operational review, Farmec continued its growth trajectory with the revenue growing by 119 percent in real terms ahead of prior year being driven by tractor and implements volumes which went up by 133 percent and 77 percent against prior year respectively.
After sales performance grew by 35 percent compared to prior year and the business unit achieved profitability growth of 92 percent in real terms.
“The business continues to put effort into meeting the growing demand of agricultural products following the 2020/21 agricultural season, which has been very positive,” Mr Manhambara said.
Mealie Brand recorded volume growth in both local and export sales during the period under review compared to the same period last year with local and export implements volumes at 147 percent and 69 percent respectively ahead of prior year pushing revenue growth by 161 percent in real terms against prior year.
“In terms of profitability, the unit witnessed a growth of 748 percent in real terms.” Barzem managed to double volumes of earth moving equipment units sold to 14 compared to prior year.
Parts revenue grew by 80 percent in real terms and service hours were 28 percent ahead of prior year.
“Overall, the business units’ revenues went up by 116 percent in real terms because of the drive towards performance by the Barzem team supported by renewed customer belief in the CAT product solutions. The BU achieved a profitability growth of 88 percent in real terms,” Mr Manhambara said.
CT Bolts recorded a 61 percent growth in revenue in real terms ahead of prior year with the key driver coming from volume growth which went up by 58 percent.
“The unit will continue to focus on realigning its distribution channels and supply chain management,” Mr Manhambara said.
Powermec recorded a 7 percent drop in revenue performance as generator units sold were 24 percent behind prior year.
Mr Manhambara said the improvement in after-sales performance by 11 percent compared to the previous year provided stability to the overall performance for the unit despite the impact of Covid-19.
He said management is seized with the repositioning of the business unit to reach new markets and customers.
This follows the group’s completion of acquisition of Scanlink (Private) Limited and Tredcor Zimbabwe (Private) Limited as 100 percent subsidiaries of Zimplow following the fulfilment of all conditions precedent in July 2021.
Mr Manhambara said the group is constantly evaluating its positioning in the markets in order to maximise and deliver value to stakeholders. - ebusinessweekly.