Axia Corporation records mixed results across units

Axia Corporation, which recorded mixed performance across its operations in the first quarter to September 2024, remains optimistic that the operating environment in Zimbabwe and the region in general will improve in response to tighter fiscal and monetary policy measures being implemented by authorities.

In a trading update for the period under review, the company said management remained hopeful that the Government would continue to pursue progressive policies to stabilise the exchange rate and inflation, thereby fostering stability and growth potential in targeted markets.

“The group is focused on exploring further expansion opportunities available in the markets,” reads the trading update.

During the quarter under review, TV Sales & Home revenue grew by 14 percent compared to the same prior year period while volumes grew by 10 percent compared to the same period last year.

“Growth is attributed to the winter warmer promotion and big birthday promotions with reduced prices on major categories,” the company said.

The company’s Restapedic division revenue grew by 22 percent from the same period in 2023 while volumes were 30 percent better compared to the comparative period last year.

Axia said the growth is attributed to more affordable price offerings on beds as compared to the same period last year as the market is now very price sensitive.

The Legend Lounge saw revenue decline by 1 percent during the first quarter under review compared to the same period last year while volumes remained static.

At Transerv, revenue grew by 25 percent compared to the same prior period while volumes shed 4 percent compared to the same period in prior year.

“The growth is attributed to the solar business and new shops opened in the prior year.

“Interest positively contributed to the business profitability arising from the significant growth in credit book introduced during the prior financial year,” reads the trading update.

DGA Zimbabwe’s revenue declined by 27 percent in comparison to the same period last year while volume declined by 57 percent compared to 2023.

According to Axia, the decline was due to a major supplier who partnered with DGA to form a Joint Venture to distribute its products, hence such sales are no longer consolidated as part of DGA sales.

“However, business from formal trade channels improved as close partnership and trade arrangements with major retailers began to pay off.”

In DGA Region, in Zambia, revenue declined by 20 percent in US dollar terms, though it rose by 6 percent in Kwacha terms compared to the previous year.

Volumes at the unit decreased by 24 percent from the same period last year, as the Zambian business witnessed a tougher operating environment characterised by currency depreciation and pricing which slowed down uptake of our products.

In Malawi, revenue declined by 13 percent in US dollar terms albeit against a 17 percent increase in Kwacha terms when compared to the same period last year while volumes declined by 11 percent over the same period last year.

Axia said grey imports from competitors and supply chain challenges in countries it sources its products contributed to the decline in volumes.

-herald