Online Reporter
Tapiwanashe Mangwiro
ART Corporation’s operating performance improved in the nine months to June despite lower sales volumes, as restructuring, tighter cost controls and a better product mix helped the group navigate working-capital constraints and intense competition.
Group turnover for the nine months remained broadly flat at US$21,34 million, compared with US$21,32 million in the corresponding period last year.
However, quarterly turnover declined 9 percent to US$7,06 million from US$7,79 million, reflecting weaker battery sales, working capital limitations and supply chain disruptions.
Overall group sales volumes fell 15 percent during the third quarter, leaving nine-month volumes 3 percent below the prior year.
The group said its operating results nonetheless improved from the comparable period, although margins continued to face pressure from low plant utilisation, competitive pricing and higher input costs.
Working capital remained the major constraint on production and asset utilisation, with management expecting the continued settlement of legacy obligations to free up cash and management capacity for core operations.
Energy Storage, one of the group’s key businesses, returned to operating profitability during the period, although it continued to operate below its capacity and market potential.
Battery volume in Zimbabwe fell 26 percent during the quarter and 9 percent over the nine months, while Zambia recorded a 16 percent quarterly decline and a 9 percent drop for the nine months.
Production was affected by working capital constraints, lower scrap collections and supply chain disruptions, resulting in average capacity utilisation of about 62 percent during the quarter.
The business also tightened credit controls in higher-risk distribution channels to protect cash collections, while lower-priced imported batteries gained market share across the region.
In the stationery and tissue business, Eversharp volume rose by 13 percent year on year, supported by improved product availability and continued acceptance of its product range.
However, raw material availability and limited working capital constrained further growth. Management said it was seeking to expand the brand’s market presence while improving margins through cost reductions, product mix and better supply-chain execution.
