Publicly listed tyre manufacturer, National Tyre Services (NTS) Limited says the rolling power outages adversely affected production at its tyre retreading division restricting volumes growth to just 13 percent for the year.
Power outages have crippled the operations of companies in the country. The Zimbabwe National Chamber of Commerce (ZNCC) says the cost of doing business has gone up by 150 percent.
The Zimbabwe Power Company is currently upgrading its major thermal power station in Hwange. Currently 2 generators are being installed that will produce a combined 600 MW with the first unit expected to come online in November.
“Retreading volumes were up 13% compared to prior year, and would have been higher had it not been for the frequent electricity outages that stalled production,” said the company in its 2022 Annual Report.
The group also said the continued increase in energy costs and the knock-on effects there of, are negatively affecting business operations.
The retreading volumes were sustained by improved rubber supply due to scarcity of foreign currency which impacted stock supply.
“Fleet management initiatives implemented during the year contributed to group improved sales. Although we registered growth in volumes, the Company could not fulfill all customer orders for truck, bus, and agricultural tyres due to supply chain constraints.”
Sales grew by 28 percent to ZW$ 1,223 billion due to the continued implementation of the turnaround strategy buoyed by the right product mix.
Gross profit increased by 114 percent to ZW$918million. Total operating expenses increased by 73 percent to ZW$ 674 million due to inflation and increases in administration costs incurred for opening of new branches.
Total assets increased by 258 percent to ZW$ 2.5 billion (2021: ZW$715 million) due to fair value adjustment on investment property and revaluation of owner-occupied property.
A short term loan facility, capped at ZW$ 50 million, was obtained from Standard Chartered Bank for funding working capital
needs. The loan attracts interest at 51% per annum and matures on 30 June 2022.