ART rides on surging battery sales and improved production process

Operatingprofitwentdownby8%to ZWL$219 million compared to last year.
By Business Reporter.
HARARE – Amalgamated Regional Trading (ART) says it managed to improve efficiencies and significantly reduce imports after commissioning additional injection moulding machinery at its Chloride factory three months ago.
ART chairman Dr Thomas Wushe said energy storage markets are evolving rapidly and are highly competitive, necessitating continued upgrades in technology.
“The progressive improvement of the manufacturing equipment will enable the battery business to respond, participate and gain from market developments and the attendant opportunities,” he said.
In the half year ended 31 March 2021, the group’s inflation adjusted revenue rose 14% to ZWL$1.764 billion from ZWL$1.54 billion in the same period last year.
The battery business registered a strong performance with volumes rising by 22% due to consistent product availability and improved efficiencies following the commissioning of additional plastic injection machinery.

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It remained adaptable and managed to increase export volumes by 13% compared to the same period last year.
“Export competitiveness faces risks associated with policy inconsistencies, volatile exchange rates and supply interruptions.”
Gross margins declined from 50% to 39% as prices could not be aligned to input cost increases in the short-term. Operational expenditure increased by 67% compared to the prior year.
Operating profit went down by 8% to ZWL$219 million compared to last year.
The paper business faced significant under recoveries as activity declined especially during the Covid-19 induced lockdowns. Albeit cost containment measures, the paper divisions struggled to contain the rising input costs and recorded losses of ZWL$52 million in inflation adjusted terms.
Softex tissue volumes declined by 14% compared to the prior year as demand weakened and competition from imports increased.
“Detergents volumes continued to grow in both the domestic and industrial market sectors on the back of consistent product availability and increased uptake by the market,” he said.
Eversharp was able to remain profitable, he said, as retailers started to stock up in preparation for the back-to-school period. Cost containment initiatives were maintained.
Mutare Estates performed well as timber demand remained firm.
The group continues to exercise caution with respect to its foreign currency exposure and whilst sufficient short-term facilities were established the interest rates remain punitive.
“The deliberate stocking of raw materials to cushion logistical delays was sustained during the period,” he said. Cashflows remained strained and limiting capital expenditure to essential spend remained a priority.
ART completed US$800 000 full acquisition of Softex.
In the outlook, the group will continue to seek opportunities to balance growth and broader representation in terms of products, markets and energy storage technologies.
Economic Times
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