New plant to anchor Proplastics volume growth
Proplastics turnover for the full year to December 31, 2023 grew by 22 percent to US$21,3 million in the prior year with the growth underpinned by a 22 percent increase in sales volumes.
Group chairman Gregory Sebborn, in a statement of the financials for the period under review, said the contribution from the recently commissioned new plant was significant and should continue anchoring sales volumes going forward.
“Exports sales recorded a 102 percent growth, with a contribution of 11 percent to total sales. The group secured some lucrative contracts in the region some of which will continue into the new financial year.”
Mr Sebborn said cost of sales rose by 47 percent with gross profit margins dipping 13 percent mainly on the back of reduced selling prices in the face of competitive pressures in the market as well as the aligning of costs as the business moved to a USD functional currency.
“Certain elements of cost of sales, for instance, electricity tariffs rose sharply during the year under review,” he said.
However, gross profit for the group was US$6,4 million, compared to US$7,3 million in the prior year.
Overheads fell 4 percent from the prior year while profit before tax of US$1,4 million was significantly higher than the prior year’s figure of US$893 000.
Mr Sebborn noted that the financial position reduced slightly with total assets amounting to US$22,8 million compared to US$24,6 million in the prior year as the group used available resources to reduce its liabilities, in particular foreign obligations.
He said the valuation of property, plant, and equipment for conversion to a US dollar functional currency was carried out using United States dollar-based inputs at the date of conversion.
During the period under review, the gearing ratio remained manageable at 1,5 percent, thus providing room for the group to leverage on borrowings to fund operations.
Looking ahead Mr Sebborn said the plastic tank manufacturing business which was commissioned towards the end of 2023, is anticipated to contribute positively to the volumes.
He noted that raw material pricing is anticipated to remain stable during the year, from a pricing point of view as well as availability.
“This will augur well for the business as it will ensure an uninterrupted supply of product to the market,.
He said the company’s solar generating project, which was reported on at half a year, will commence before the end of the first quarter as the procurement process for the requisite materials is already underway.
This project will not only reduce the group’s carbon footprint, but will, in addition, have a significant positive effect on the production costs as it will be fully integrated into the existing ZESA and generator supply model.
“We expect the project to be up and running by the end of the first half of the year.”
-herald
