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Zimplow reports marginal profit

Zimplow Holdings Ltd this week reported a marginal profit of US$762 000 for the year to June 30 2013, compared to a prior year loss of US$133 000, after a significant growth in revenue to US$20 million, the company has said.

Group finance director Francis Rwakonda said comparison to prior year was not truly reflective of changes as new division Tractive Power’s turnover was captured effective July 2012 after Zimplow acquired majority shareholding in Tractive Power from the Reserve Bank of Zimbabwe.

Zimplow CEO Zondi Kumwenda said Mealiebrand plough volumes went up to 1 602 units from 1 511 in 2012, with local sales growing by 21% while export sales fell by 25%.

“Export customers held back deliveries due to some perceived uncertainties prior to the election, and price competition from the East remains stiff,” he said.

Total implements and hoe sales also went down by 4% while hoes and spares volumes slid by 29% and 14% respectively.

CT Bolts division’s sales went down in general, with the movement attributed to a slowdown in industrial activity and tight liquidity.

Kumwenda said parts turnover at Barzem and Farmec stood at US$3,4 million against US$3,2 million last year and US$1,6 million against US$1,7 million in 2012 respectively. Parts turnover at Northmec was US$121 000 against US$85 000 last year.

Going forward, Kumwenda said Zimplow was optimistic the new government would favour agriculture, adding the group was poised for growth and future success building on a solid balance sheet and a streamlined business.

As part of streamlining operations to focus more on key sectors of agriculture, mining and infrastructure, Zimplow in June successfully disposed of Puzey & Payne passenger vehicle division for US$1,6 million.

“The group anticipates that the disposal of (fastener-manufacturer) Tassburg will be completed by 30 September 2013. Negotiations are in progress,” Kumwenda said.

The group said uncertainties associated with an election year impacted negatively on the equipment supply businesses.

Zimplow said it hoped sound economic policies that attract foreign direct investment, promote exports as well as bring stability to the financial service sector would be implemented by the new government.

“The country is still far from rehabilitating itself on infrastructure, mining and agriculture. This presents a short to medium term opportunity for the group,” said the company in a statement attached to its financial results.

“The second half is ordinarily the group’s strongest trading period for the agricultural part of the business and recovery of this sector will see the group posting operating profits for the full year to December 2013.”

CT Bolts division’s sales went down in general, with the movement attributed to a slowdown in industrial activity and tight liquidity.

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