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Sunday, August 7, 2022
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Zimplow Extends FY Profit On Volumes Growth

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Listed engineering firm, Zimplows posted a 26 percent profit gain for the year ended December 2021 (FY-21) of ZWL$434.6 million from ZWL$ 345 million prior year in inflation-adjusted terms largely attributed to growth in volumes with subsidiaries,  Farmec and Barzem posting record performances.

Briefing analysts, group chairman Godfrey Tsikayi Manhambara said group revenue increased by 54 percent for the financial with operating profit for the year gaining 222 percent in comparison to the prior year performance despite increased operating expenses.

The board declared a final dividend of ZWL 35.40 cents per share for the year.

In the farming cluster, Farmec grew volumes for tractors by 48 percent, tractor drawn implements by 56 percent, parts sales by 30 percent and service hours by 22 percent in comparison with prior year. This resulted in overall revenue growth of 48 percent and a growth in the Company’s operating profit by 69 percent in real terms against prior year performance.

Mealie Brand recorded a growth in volumes in local implements sales of 10% against prior year performance.

In the logistics and automotive cluster, Scanlink’s parts sales grew by 30 percent driven by improved demand.

“Hours also grew by 4% against prior year. As a result of the positive execution of the renewed supply chain model, Scanlink increased its revenues up by 15% and operating profit by 145% in real terms against prior year. The outlook for the financial year 2022 looks brighter and the business unit is looking to follow through on the considerable backlog in truck and bus orders from the previous year,” said Manhambara.

At Trentyre, volumes of Passenger Car Radial (PCR) tyres grew by 28 percent against the prior year.

“This growth in volumes was driven by improved distribution channels and stock availability. Improvements in stock availability also propelled growth in volumes for Truck, Bus and Radial (TBR) tyres by 23% against the prior year.”

In the mining cluster, CT Bolts has been making steady progress in asserting its dominance in the fasteners industry.

The business unit achieved volumes growth of 48 percent against prior year performance. This was driven by the drive towards establishing new market segments such as prepacked fasteners for the retail market, specialised mining bolts and various other consumables.

The drive by the government to support infrastructure development through the Emergency Road Rehabilitation Programme (ERRP) culminated in increased earth moving equipment sales at Barzem.

Overall, volumes of earth moving equipment sales grew by 84 percent against prior year performance. On the other hand, the focus on production by major mining houses that use CAT surface mining and handling equipment resulted in increased fleet maintenance.

“Consequently, parts sales grew by 75% and hours sold by 65% against prior year performance. Revenue therefore grew by 102% whilst operating profit was 109% ahead of prior year performance.”

The group said Barzem will exit the Caterpillar distributorship on 30 September 2022 given the changes in the strategic direction by both the supplier and Zimplow Group.

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