HomeBusiness DigestTractive powers on despite hurdles

Tractive powers on despite hurdles

Dumisani Ndlela

CONGLOMERATE Tractive Power Holdings has released a fair set of results for the half-year to February, increasing turnover by 419% to $594,4 billion against declining motor vehicle sales volumes at one of its subsidiaries.

Tractive, a forme

r subsidiary of Astra, is a holdings company whose various subsidiaries market and support a broad range of machinery and vehicle units.

Brazem has a dealer representative agreement for Caterpillar and Hyster equipment; Farmec holds franchises for Massey Ferguson, Vicon, Howard and Drotsky; and Puzey & Payne handles Peugeot, Mazda, Mitsubishi, VW and Audi vehicles.

In a statement accompanying the group’s financial results, the board said motor vehicle sales at Puzey & Payne had been hit by a new requirement that procurement of locally-assembled units be made using foreign currency, resulting in a decline in sales.

However, demand for vehicle servicing and repairs has remained relatively firm, with customers maintaining older units.

“At Barzem and Farmec, trading volumes of machinery units and the demand for component parts from mining and agricultural sectors were severely depressed by a marked shrinkage in demand,” said the statement accompanying the results.

“The constraints at Barzem were partially alleviated by growth in customer-funded sales of mining-related machinery and direct parts procurement, and by increased exports of artisan skills to regional mining ventures.”

The group operating profit increased by 560% during the period under review to $123,5 billion, from $18,7 billion during the comparable period the previous year.

Attributable earnings, at $134,3 billion, were 849% up on the same period last year, pushing basic earnings per share up 829% to $984,86 during the six-month period.

Investments in properties were adjusted by 262% on August 2005 values. Delayed and little access to foreign currency has resulted in a positive group bank balance in the period, which resulted in net finance income of $20 billion.  Provisions were made for exchange losses of $30 billion on outstanding foreign accounts payables.

The group’s board was however upbeat about prospects in the second half of the year.

“Enquiries remain firm at all business units. However, the group’s ability to meet demand in the outlook period will continue to be determined by the availability of foreign currency. Supply of foreign currency is unlikely to improve until financial pressures on exporters are eased by movement in the rate of exchange,” the group’s board said.

“General market demand for the group’s high-quality products remain heavily dependent upon the resolution of uncertainties currently affecting the mining and agricultural market segments, with an increasing number of mining and construction enquiries presently restricted to the planning phase.”

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