ART Holdings faces challenging Year amid economic headwinds

ART registered an operating profit of US$1 million but recorded a loss before tax of US$1,5 million, weighed down by restructuring costs of US$675,000.
ART Holdings Limited (ART) faced a turbulent financial year ending 30 September 2024, as ongoing economic challenges impacted its strategic transformation.

Dr Thomas Utete Wushe, the group Chairman, acknowledged the difficulties but highlighted the resilience of key business units and the company’s focus on repositioning for long-term growth.

“The group had a difficult year and was not able to deliver the expected level of financial performance as the ongoing transformation of the business was severely impacted by changes in the economic environment,” Dr Wushe stated.

Revenue declined by 11 percent compared to the prior year, largely due to product availability challenges and the deliberate decision to scale down paper production. Export volumes also fell by 15 percent, with foreign currency shortages in Zambia and Malawi exacerbating payment delays.

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Despite these challenges, Dr Wushe emphasized the group’s commitment to strengthening its foundation.

“The group was relentless in its drive to fix, strengthen, and reposition the business,” he said.

ART registered an operating profit of US$1 million but recorded a loss before tax of US$1,5 million, weighed down by restructuring costs of US$675,000.

The Energy Storage segment showed resilience despite an 8 percent decline in overall battery volumes. Dr Wushe noted that “Demand in the market remained high despite increased competition from imports, with industrial battery volumes rising 16 percent, driven by demand from the mining, energy, and telecommunications sectors.”

He added that ART had launched maintenance-free batteries and expanded battery clinics to combat counterfeit imports.

In the Stationery division, volumes fell by 10 percent due to power-induced shortages and market disruptions. However, the new Eversharp pens performed strongly, contributing 10 percent of total revenue.

“The listing of Eversharp pens in Zambia’s formal retail market is expected to boost exports,” Dr Wushe remarked, affirming the brand’s role in the education sector.

The Paper division faced significant challenges, with production scaled back to optimize new equipment. Dr Wushe remained optimistic, stating, “We have identified partners to enhance our capabilities and technologies to support our innovation pipeline and talent base.”

Mutare Estates recorded a 3 percent increase in timber sales volumes and improved gross margins, but illegal mining activities remain a concern.

“We will continue to engage law enforcement authorities to ensure the Estate is safeguarded,” Dr Wushe said.

Looking ahead, Dr Wushe acknowledged the unpredictable economic environment but expressed confidence in the group’s restructuring efforts.

“The Board remains confident that ongoing efforts will gradually strengthen the Group and increase agility in seizing opportunities across all business units,” he concluded.-ebsienssweekl