Chronicle Editor
Enacy Mapakame, Harare Bureau
ART Corporation says revenue for the first quarter to 31 December 2020 grew 23 percent attributable to improvements in the business environment during the review period.
The group acknowledged the relative stability of the exchange rate on the foreign currency auction system, although it continued to rely on export earnings and local free funds to sustain raw material imports.
“The operating environment in the first quarter ended 31 December 2020 improved following the easing of Covid-19 trading restrictions,” chief executive officer, Milton Macheka, said in a trading update for the quarter.
“There supply of electricity improved during the period although the cost continued to escalate as prices were aligned to the prevailing foreign currency auction rates.”
Overall volumes for the quarter rose 26 percent compared to the same period last year as a result of improved product availability. Export earnings on one hand increased by seven percent compared to same period in the prior year.
According to the group, the batteries business segment-maintained production volumes following the easing of the restrictions during the period and managed to record a 48 percent increase in sales volumes compared to the prior year. Battery export sales volumes were five percent ahead of the same period last year.
Chloride Zambia volumes increased by seven percent compared to the same period last year as a result of improved product availability and distribution.
The paper divisions, Kadoma Paper Mills and National Waste Collections, were adversely affected by the Covid-19 pandemic. Sales volumes recovered from the low prior year levels by 46 percent at Kadoma Paper Mills and 69 percent at National Waste Collections mainly due to improved power supply.
However, the high cost of raw materials, fuel and electricity had an adverse impact on the business. Waste paper imports were increased as availability of paper in the local market remained a major challenge.
Softex volumes for the quarter inched four percent as a result of the improved supply of raw materials and the continued growth of the non-tissue product range.
However, Eversharp volumes declined by 22 percent as the scholastic market segment continued to be affected by the pandemic.
“Management’s efforts to grow the export and the non-scholastic markets enabled the division to breakeven during the period,” said Mr Macheka.
Timber volumes increased by eight percent as demand for structural timber remained firm. While local industry battles the negative effects of Covid-19 pandemic, Mr Macheka indicated the business remains in a sound financial condition and anticipates its overall performance to remain positive. The paper and stationery sales volumes are however expected to remain subdued.
Said Mr Macheka: “Measures taken to contain costs, harness foreign currency from exports and domestic free funds, whilst scaling down investment to preserve cash will enable the group to sustain operations.”
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