Art Corp’s revenue in 4 months to January 7% down to $10.4 mln
HARARE – Art Corporation’s turnover in the four months to January 31, 2017 is down 7% to $10.4 mln from $11.2 mln recorded in the comparable year ago period due to lower lead exports and price adjustments in Zambia.
Giving a trading update at the company’s annual general meeting Group Chief Executive Officer Tapiwa Ameer said sales volumes were mixed amid strong performance at Kadoma Paper mills and the Batteries division.
The Paper division sales volumes were 10% up on prior year at 1,470t compared to 1,339t in 2016. The Batteries Division in Zimbabwe registered a 4% increase in volumes at 70.537 units compared to 68.016 units in prior year same period. Chloride Zambia also registered a marginal 1% decline in volumes to 16,673 units compared to 16,760 units in 2016 same period.
At Softex volumes were 12% below in 2017 at 712t from 809t. Eversharp’s volumes declined 8% to 19.2 mln compared to 20.76 mln in prior year same period.
Ameer said while full year revenue projection of $35 mln is currently trailing budget, half year and full year profit projections are on course to be met.
He said these will be achieved as the company is now seeing the impact of its investment in Chloride. The company last year commissioned its new factory at Chloride which Ameer said had seen improved volumes at a lower cost of production.
He said Kadoma Paper is benefiting from government’s import control measures such as SI64 of 2016 and SI20 while the forex challenges in the economy had hived off some competition re from imports. As a result Kadoma is now operating at breakeven. “We will also drive more exports for foreign currency sufficiency.
During the four months, gross profit margins were 40% compared to 39% in prior year against a budget of 36%. Resultantly, operating profit of $1.4 mln was realised for the period. Ameer said cash-flows remain tight due to legacy issues but the group has been able to finance operations.
Debt reduced to $5.46 mln from $5.90 mln in September 2016 while gearing was at 31% from 54% in 2016. Ameer said the cost of borrowing decreased marginally to 15% compared to 16% in prior year, adding that the company envisages more reduced rates following the recent directive from the central bank in the 2017 monetary policy for banks to further lower lending rates to below 12%.
At the AGM, audit and director fees were approved at $111 000 and 101 000 respectively.