NTS defies power outages, records increased volumes
National Tyre Services Limited (NTS) recorded an increase in volume performance for the third quarter to December 31, 2022 albeit a difficult environment worsened by power outages.
Apart from inflationary pressures and the adverse impacts of Covid-19 as well as the supply chain disruptions caused by the war in Ukraine, local businesses battled erratic power supplies.
This had a knock on effect on business as it cut on production time, resulting in reduced output.
For NTS, customer service delivery was significantly affected.
“Depressed electricity generation during the third quarter of 2022 resulted in increased load curtailment countrywide.
“Revenue generation and customer service delivery were negatively affected by power outages that disrupted the Company’s retreading factories and retail operations.
“Although constrained by the above, the Company managed to retain business from key fleet operators from October to December 2022,” said NTS in a trading update for the period under review.
Overall volumes grew to 39 607 compared to 38 732 recorded during the same period in the prior year.
During the third quarter period tyre services grew by 5 percent during the period under review compared to the same period last year.
“Good workmanship improved demand for tyre services across all our branches,” said NTS.
New tyre sales volumes dropped by 1 percent to 8 847 during the review period compared to 8 931 recorded during the same quarter in 2021 due to the negative impact of power outages on the company’s retail operations, which also affected the cumulative performance.
At 3 081, retreading sales volumes declined by 13 percent during the third quarter of 2022 compared to 3 560 recorded in the same period in the prior year as retreading factories were severely affected by power challenges.
In the year to December 2022, overall volume performance decreased by 14 percent to 118 110 compared to the 137 669 achieved in the prior year as the energy crisis deepened, negatively affecting demand for tyre services across the group’s retail outlets.
Industrywide, power outages have been cited as a major challenge affecting capacity utilisation.
NTS is however upbeat of recovery going forward driven by improvements in energy generation and the agriculture sector, which is a key driver to economic growth. This year, the economy is expected to grow by 3,7 percent on the back of strong agriculture performance as well as increased mining activity.
“We are optimistic that the economy will recover, backed by an improvement in energy and agricultural produce growth given the current strong rainy season,” said NTS.-ebusinesswekly
