Zimbabwe’s largest tyre and tube retailer, National Tyre Services Limited posted a 548% profit before tax after reporting US$329,166 for half year period ending 30 September 2017 compared to US$73,503 recorded in the same period last year due to high demand for low cost tyres and retreads.
The group chairperson, James Moyo said the company recorded heavy profits despite shortage of foreign currency on the market.
“Revenue increased by 18% to US$6,5 million in comparison to the same period last year whilst the profit before tax increased significantly by 548% to US$329,166 from a loss of US$73,503 recorded in the previous year.
“The company continued to offer a combination of budget and premium brands in line with the existing market segments.
“Cordial relations with major external and internal suppliers ensured continuous supply of key brands, cost control measures initiated a year ago continue to bear fruit as enhanced margins contributed to profitability.
“The economy continues to suffer from foreign currency and cash shortages,the shortage of foreign currency is creating sporadic shortages of trading inventory.
“This has also resulted in the withdrawal of credit facilities as businesses try to manage their cash flows and reduce non-performing debtors.
“The benefits arising from the past agricultural season are evident through increased purchasing power and gradual up trading on key consumer goods,” said Moyo.
He added that the increased differential in the pricing of low cost budget truck tyres and retreads has worked in favor of their business.
“The increased differential in the pricing of low cost budget truck tyres and retreads has worked in favor of our business as we have recently witnessed an increased inflow of casings,this will increase capacity utilization in both the Harare and Bulawayo factories.
Meanwhile the group did not declare any dividend due to their unstable trading environment.