adminEnacy Mapakame Business Reporter
Paper and packaging group, Amalgamated Regional Trading (ART)’s profit for year ending September 30. 2017, jumped 43 percent to $2,75 million on the back of a strong performance by its battery unit.
Revenue for the period also rose 13 percent to $33,5 million on the back of strong demand and product availability. The batteries division contributed 66 percent to total revenue while plantations, Eversharp and paper unit contributed 4 percent, 15 percent and 15 percent respectively. Chief executive Milton Macheka told analysts at the group’s financial results presentation that the financial year 2017 has been a volatile year and most challenging due to cash shortages and foreign currency deficiencies that affected ability to access raw materials and other services.
However, an operating profit of $5 million was achieved, which is 36 percent above prior year. In turn, operating expenses increased 22 percent on the back of increased marketing and promotional activities as well as rebranding of some units. The group invested $2,1 million in new import substitution machinery for battery division at Chloride, while efforts are being made to reduce working capital gap. Resultantly, the gap reduced by 30 percent to $4,8 million.
The battery division achieved an operating profit of $3,8 million on the back of a 25 percent increase in factory sales volumes and 41 percent increase in sales volumes at Exide Express as the units realised the benefits of the new plant commissioned in 2016.
“The division also benefited from the impact of Statutory 20 of 2016 and the foreign currency challenges, which limited battery imports,” said Mr Macheka. Eversharp division posted $4,8 million in revenue and an operating profit of $916 000 compared to $763 000 posted in the prior year due to growth in export volumes.
“This is the business with strong export potential with dominance even on the local market,” said Mr Macheka adding the division is looking at introducing an exercise book making machine. The unit has been operating at 78 percent capacity compared to 72 percent in the prior year. The paper division achieved an improved performance recording a consolidated operating profit of $229 000 compared to a loss of $227 000 in the prior year due to improved sales volumes.
The Zambia business recorded an operating loss of $67 000 due to low market uptake in 2017. In the outlook, the group is expecting to retool its Kadoma Paper Mills to enhance productivity and efficiency, which should push revenue growth. The group projects revenue for financial year 2018 to reach $39 million.
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