National Tyre Services commends Government monetary measures

NATIONAL Tyre Services (NTS) Limited has commended the monetary measures being implemented by the Government to stabilise the local currency saying that the initiatives will aid planning and business growth.

In a statement accompanying its abridged financial results for the year ended 31 March 2023, the company chairman Mr Rutenhuro Moyo said a cocktail of monetary measures implemented by the Government to stabilise the local currency are bearing fruit given that the local currency is rapidly firming against the United States dollar.

He said foreign currency exchange rates are stabilising on both official and prallel exchange markets.

“We are cautiously optimistic about continued stability in exchange rates, which will aid planning and business growth.“We are projecting increased demand for tyres and related product and services pick-up in the build up to general elections and the upcoming agricultural season,” said Mr Moyo.

“To capitalise on the obtaining environment, NTS will continue to focus on cost containment and enhanced market outreach programmes to increase the inventory turnover ratio and improve profitability.”

The Government continues to intervene through different policies to stabilise the economy and maintain stability in exchange rates.

In May, a chain of measures were put in place to promote the use of local currency which has seen a surge in the demand for the Zimbabwean dollar resulting in the local currency gaining its strength against the greenback.

This has also seen a drop in prices of basic goods and services in the process strengthening consumer purchasing power.

Mr Moyo highlighted that the industry is expecting that the current stability in power generation will continue to minimise production disruptions.

Last week, President Mnangagwa commissioned the US$1,5 billion Hwange Thermal Power Station Units 7 and 8 Expansion Project in Matabeleland North Province, which has added 600 MW to the national grid.

The coming in of Hwange Units 7 and 8 has brought relief tor industries as the nation is now guaranteed an uninterrupted power supply, especially the productive sector, which includes agriculture, mining and manufacturing.

For the past month or so, the country has experienced flawless power supply with different sectors of production commending the Second Republic for the development initiatives across the country.

Meanwhile, NTS said sales revenue grew by 21 percent in inflation-adjusted terms to $4,332 billion from $3,579 billion recorded last year due to the continued implementation of the turnaround strategy.

“Gross profit decreased by 8 percent to $2,462 billion from 2,686 billion in 2022 as the cost of sales increased due to higher costs of imported products.

“Total operating expenses were maintained at prior levels (inflation-adjusted) at $2,170 billion (2022: ZWL2,181 billion) due to cost containment measures implemented by your management.,” said Mr Moyo.

He also said the company incurred a loss before tax of $427 million in inflation-adjusted from a profit of $1,187 billion in the previous year.
Mr Moyo said the availability of Dunlop tyres was instrumental in retaining a large corporate customer base during the year.

As a result, he said premium sales in units increased by 14 percent over the prior year.

“NTS remains viable despite the fact that the competitive space continues to be crowded by new entrants across the country. The budget brands segment was impacted by the restricted access to foreign currency which in turn affected product availability,” he said. —chronicle