Chronicle Editor
Judith Phiri, Business Reporter
ZIMBABWE Stock Exchange (ZSE)-listed manufacturing group, Amalgamated Regional Trading (ART) Holdings has said its export volumes for the third quarter to June 2023 recovered, registering a 16 percent increase from the prior year in line with improved product availability.
In a trading update for the period under review, the group said coupled with export volumes increase, revenue also grew.
ART Holdings are the producers of Eversharp pens.
“Revenue for the period to June 2023 grew by 54 percent to ZWL$75,2 billion in inflation-adjusted terms compared to the prior year. The revenue in historical terms stood at ZWL$37,5 billion, 523 percent above the prior year.
“The Group remains profitable, however, margins have come under pressure due to increased input costs and the impact of the punitive foreign currency retention policy on exports,” said ART Holdings.
In terms of divisional performance, it said Eversharp volumes increased during the quarter by 28 percent to 12 430 000 pens on the back of increased production output following retooling and improved power supply.
The group said exports into Zambia resumed and stationery trading was buoyed by the launch of the Eversharp Mate and Eversharp Pen Pal brands in response to market demand.
ART Holdings said: “At Mutare Estates Timber volumes at 2 350 cubic meters increased by 7 percent from the prior year. The order book for both structural timber and pallets remains firm as customers in the sector preferred to trade in foreign currency.”
However, the group said the overall volumes for batteries declined by nine percent from the prior year volume of 90 445 units due to the power-induced downtime at the beginning of the quarter.
It said production efficiencies following the commissioning of new grid casters increased output in June and July which boosted the “Powered by Exide” winter promotion.
“The project to increase automotive battery manufacturing capacity is nearing completion and will enable improved stockholding across all product ranges. The division commissioned an additional 200KVA generator and is working closely with the power utility to upgrade power at the Workington factory.”
ART Holdings said paper volumes decreased by five percent from the prior year volume of 2 290 tonnes as trading was affected by exchange rate volatility and pricing distortions, particularly in the formal retail sector.
While demand for bulk tissue on the export market remained firm the group said competition from imports increased in the informal market with pricing and access to foreign currency is key in creating competitive advantage.
“The new Tissue Mill will be supported by the streamlining and restructuring of the paper divisions in order to drive performance along the value chain. A new converting line will be commissioned before the end of the financial year with resultant cost savings, quality improvement and increased tissue output.”
Going forward, ART Holdings said the Group’s resilience has been bolstered by its retooling programme despite the economic headwinds and the business will leverage its global sourcing partners to deliver cost-competitive raw materials.
It said the increased capacity and new equipment will enable them to deliver a wider range of quality products to their customers.
“The group’s cashflow position remains constrained, however, management is confident that on-going restructuring initiatives will enable it to strengthen its balance sheet and achieve financial flexibility given the prevailing turbulent economic conditions.”
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