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Art Corporation Revenue Firms In Second Quarter

Zimbabwe Stock Exchange listed manufacturer and distributor of paper products, stationery and batteries, Amalgamated Regional Trading (ART) Holdings Limited, revenue for second quarter (Q2) grew 14 percent against comparable period prior year to reach ZWL$1.764 billion as sales volumes recovered.

Overall volumes for the half year to 31 March 2021 were up by 15 percent.

The battery business registered a strong performance with volumes increasing by 22 percent due to consistent product availability and improved efficiencies following the commissioning of additional plastic injection machinery.

The paper business faced significant under recoveries as activity declined especially during the COVID-19 induced lockdowns.

“Notwithstanding management’s cost containment initiatives, the paper divisions struggled to contain the rising input costs and recorded losses of ZWL$52 million in inflation adjusted terms,” said ART.

Softex tissue volumes declined by 14 percent compared to the prior year as demand weakened and competition from imports increased.

The Group said export competitiveness face risks associated with policy inconsistencies, volatile exchange rates and supply interruptions.

Eversharp was able to remain profitable as retailers started to stock up in preparation for the back-to-school period. Cost containment initiatives were maintained.

Due to cash flows constraints limiting capital expenditure for essential spend, the Group withheld interim dividend.

“Gross margins declined from 50% to 39% as prices could not be aligned to input cost increases in the short-term. Operational expenditure increased by 67% compared to the prior year. The Group’s operating profit decreased by 8% to ZWL$219 million in inflation adjusted terms compared to last year,” said the company.

The Group also announced that its offer for the acquisition of Nampak’s shareholding in Softex was accepted

“The consideration of US$800,000 will be paid in six equal monthly instalments. The transaction will enable the consolidation and capitalisation of the paper business going forward,” said ART.

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