NTS sees growth in tyre sales despite challenges

NATIONAL Tyre Services (NTS) says it is confident that interventions being implemented by monetary authorities to boost demand for the Zimbabwe Gold (ZiG) will stabilise inflationary pressures.

The Reserve Bank of Zimbabwe (RBZ) introduced the ZiG, the country’s new medium of exchange in April this year, as part of several policy measures to address exchange rate volatility, curtail inflation, and restore macro-economic stability.

In a statement accompanying financial results for the year ended March 31, 2024, the Zimbabwe Stock Exchange-listed firm said: “NTS is upbeat that the strategies being implemented by the authorities to boost demand for ZiG will stabilise inflationary pressures, enhance market acceptance and confidence.

“Stability and general pricing consistency will foster investor confidence and create a conducive business operating environment.

“As we look ahead, we envisage leveraging on the rolling extensive road rehabilitation programme, which will improve infrastructure and enhance road safety, potentially leading to increased vehicle traffic and demand for our tyre services.” it said.

Procurement of market driven premium tyres resulted in a 24 percent increase in new tyre sales volumes when compared to the prior year.

“Our solid and long-term trading relationship with our suppliers sustained business operations through seamless supply of stock.

“Although the company closed four retail outlets at the beginning of the financial year, NTS managed to maintain a strong presence in affected areas through personal selling.”

Already, NTS said it has realised strong demand for light truck and luxury motor vehicles tyres during the build up to the Southern African Development Community (SADC) summit.

And the company intends to boost profitability and market share through offering a balanced product portfolio of meticulously engineered tyre brands.

“We are optimistic of a return to normal peak season in the second half of the year, typically hot and rainy seasons drive demand for tyres and related services,” it said.

During the period under review, the firm retained a large re-treading customer base through improved turnaround time and unmatched workmanship.

Re-treading sales volumes rose by 10 percent from April last year to March this year when compared April 2022 to March 2023.

NTS intends to boost profitability and market share through offering a balanced product portfolio of meticulously engineered tyre brands.

“We are optimistic of a return to normal peak season in the second half of the year, typically hot and rainy seasons drive demand for tyres and related services.

“Sales grew by 95 percent (inflation adjusted) to $259,669 billion (2023: $133,291 billion). Gross profit increased by 39 percent to $105,314billion (2023: ZWL75,752 billion).

“Total operating expenses increased significantly (inflation adjusted) to $114,067 billion (2023: $66,775 billion).

“The company incurred a loss before tax of $39,276 billion (inflation adjusted) from a loss of $7,253 billion in the previous year,” it said.-ebsinessweekl