Phoenix Consolidated Industries group CEO Francis Rodrigues sees the company breaking even by year-end and posting a marginal loss by half year.
At the company’s annual general meeting held last week, Rodrigues said the first four-five months of the financial year had been difficult, worsened by the liquidity situation prevailing in the economy.
He said management was currently in the process of finalising its April half year results, where an improvement was expected in some of the units, especially Scandia Steel & Wire.
Overall, the order book for the company stood at US$400 000.
Scandia had shallow trade last year but efforts were being made to improve operations, The company would become profitable after making losses in the first three months. Rodrigues said the Brushware could be the most profitable division if working capital for equipment was invested. William Smith & Gourock had been given the best performer award.
Scandia extended its markets to South Africa, Zambia, Namibia and was now targeting Tete in Mozambique.
J W Searcy performed well in the first four months of 2013 and was profitable, he said.
Rodrigues said tight liquidity had a twofold effect on the company — reducing turnover and forcing an increase in borrowings at high interest rates. Borrowings currently stood at US$2,5 million
“Cheaper longer-term funding is being pursued both on local and foreign financial markets’’, he said.
In the short-term, Phoenix expected to benefit from temporary infrastructure required for the elections, much needed re-fencing of farms and to rehabilitation of water purification and sewerage plants.
In the year to October 2012, the net worth of the company fell US$1,36 million due to the loss incurred. The company continues to be in a net current asset position. Fixed assets reduced by US$724 000 as a result of the disposal of McMeekan and Precision Grinders, and annual depreciation.