HomeBusiness DigestSteelnet defies exports decline, posts 320% profit

Steelnet defies exports decline, posts 320% profit

Roadwin Chirara

STEELNET’S profit for the half-year has increased by 320% to close at $35,8 billion despite a decline in the company’s export volumes by 32%.

al, Helvetica, sans-serif”>Steelnet group managing director, David McCann, attributed the decline in the company’s export volumes to continued shortages of raw material required for the production of its various products.

“We continue to face shortages in the required raw material but as a company we decided to focus on the production of high-value ranges which enable the group to remain profitable,” McCann said.

In the period under review, Steelnet’s net cash generated from its operations closed at $38,9 billion, a position which was boosted by the change in its production varieties.

McCann said the situation had resulted in the company failing to meet market demand during the period under review.

“We still have a string demand for the company’s products locally and regionally but we could not meet them due to the shortages of the raw materials,” said McCann.

Steelnet currently exports to Malawi, Botswana and South Africa, with Zambia taking up 41% of the company’s total exports.

“We still enjoy a strong demand in the region especially in Zambia where the market has become the biggest export market for the company, accounting for 41% of our total exports,” said McCann.

He said the company’s foreign currency position had been affected by the current reconstruction of AA Mines, which form part of SMM Holdings.

“As the chairman noted in his statement, the company as part of the SMM Group, benefited from AA Mines foreign currency generation capabilities,” McCann said.

He however said the group was pleased with the company’s performance for the half year despite the continued economic challenges facing the country.

“All I can say is the company performed above market expectation considering the current economic challenges facing country,” said McCann.

The Steelnet MD said the group had managed to repay its short-term borrowings, a situation which resulted in the company closing the half-year at a $21,7 billion cash on deposit position.

He said the company was however looking at increasing its capacity utilisation going forward.

“We are currently operating at low utilisation capacity, a situation which we expect to be resolved going forward,” McCann said.

During the period under review, Steelnet contributed $2,4 billion as part of fees for SMM Holdings administrator, Afarus Gwaradzimba.

Steelnet’s subsidiary, BMA Fasteners’ turnover closed at $25,4 billion, while Hastt Zimbabwe ended the half-year with a turnover of $16,7 billion.

Steelnet’s other subsidiary, Tube and Pipe Industries, achieved a turnover of $58,6 billion for the first six months.

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