Zimplow pins hope on mining, construction growth
AGRO-INDUSTRIAL firm, Zimplow Holdings, anticipates a positive outlook for its operations largely underpinned by the envisaged growth of the construction and mining sectors.
In a recently issued financial report for the half year period ended June 30, 2020, Zimplow commended the Government’s drive to steer improved performance of the agriculture and mining sectors as springboards of the economy.
“Our outlook is cautiously positively supported by good leads in the construction and mining industry. In addition, we are encouraged by the Government’s focus on the performance of agriculture and mining,” said Zimplow.
Agriculture and mining are the major centrepieces of Zimbabwe’s economy and the Government recently launched a strategic roadmap aimed at achieving a US$12 billion mining economy by 2023.
President Mnangagwa launched the Agriculture and Food Systems Transformation Strategy a few weeks ago, which seeks to transform the agriculture sector into an US$8,2 billion industry in five years.
“In light of this the group will continue to look out for opportunities to expand its business,” said Zimplow.
Under its strategic business units, Zimplow owns Barzem, CT Bolts, Powermec, Farmec and Mealie Brand.
During the period under review, the group said all business metrics were affected by the Covid-19 pandemic.
“The group managed to pull through this difficult and unprecedented trading period. Revenues showed resilience coming in 12 percent ahead of last year in inflation-adjusted terms from ZWL$428 million to ZWL$479 million.
“Profit after tax was five percent ahead from ZWL$134 million to ZWL$140 million,” it said.
In the six months ended June 30, 2020, Barzem’s revenues went up 145 percent to ZWL$221 million from ZWL$90 million.
After sales business parts and service hours were also ahead of the previous year by three percent and 19 percent respectively despite losing hours to the Covid-19 pandemic induced lockdowns.
During the same period CT Bolts also continued its recovery with a 73 percent growth in revenue to ZWL$22 million.
“The unit achieved 21 percent volume growth compared to the same period last year.
“The operating profit for the unit was also up 25 percent to ZWL$10,6 million.
“The unit will continue to focus on product spread while realigning its distribution channels,” said the company.
Zimplow also reported that Powermec revenues were flat at ZWL$52,2 million with generator sales at the same level as last year.
The after sales business showed improvement with parts sales 10 percent ahead of prior year in real terms and service hours sold 111 percent ahead of the prior period.
“The efficiency of our service delivery is a prime focus for the business together with the roll-out of our sustainable energy and hybrid energy solutions.”
Farmec achieved a resilient performance with the operating profit for the first half growing to ZWL$72 million from ZWL$62 million prior year.
“This growth was supported by the implements sales volumes, which were 35 percent ahead of prior year. Tractor volumes were 28 percent behind prior year at 33 units sold,” said Zimplow.
“After sales parts and hours sold dipped 13 percent and 29 percent respectively.
“We are encouraged by the reception of the MF Global Series range of tractors by the Zimbabwean farmers and the subsequent arrival of lower range horse power tractors just after the first half.”
During the period under review, Mealie Brand performance was sharply down compared to the same period in 2019. The group attributed this to the lingering effects of last years’ drought and limited access to regional markets.
“Local and export implements volumes were 62 percent and 84 percent down respectively.
“The first two trading months after the half-year end are showing a recovery in business revenues,” said Zimplow. —chronicle.c.zw
