admindiscontinued operations.
Art has been recording losses since dollarisation due to lack of working capital, non-performing units and huge debts. In the comparable period last year the company made a loss of US$946 000 and US$2,6 million in the full year to September 2011.
During the period under review revenue grow 19 percent to US$16,9 million from US$14,2 million in the comparable period with a positive growth in margin from 32 percent in March 2011 to 34 percent.
Although operating profit during the period under review increased to US$1,3 million, a significant interest cost of US$1 million was incurred resulting in a marginal retained profit.
During the period under review Chloride carried the group, moving from a full year loss in 2011 of US$1,5 million to a profit of US$100 000.
Chloride also recorded an increase in volumes, growing 37 percent on the back of improved factory efficiencies. Battery Express and Chloride Zambia also reported increased volumes growing by 10 and 13 percent respectively.
“In addition, the discontinuance of the loss-making stationery operation (Fleximail) in 2011 has positively impacted on the group’s gross margin and profitability.
“While capacity utilisation in the group’s operations grew from 57 percent at September last year to 61 percent for the period to March this year, further growth prospects were limited by liquidity constraints in the economy as well as the attendant high cost of borrowing,” the company reported.
In respect of its operations, the Batteries division’s turnover grew by 24 percent to US$10,2 million, representing 60 percent of group revenue.
The company said the turnaround of Chloride and improved market volumes in the distribution units contributed to the performance. Chloride volumes grew 37 percent
on the back of improved factory efficiencies.
At the distribution units, Battery Express and Chloride Zambia volumes grew by 10 percent and 13 percent, respectively. The Paper and Stationery division’s revenue grew by 8 percent from US$5,6 million last year to US$6,1 million in the period under review, which resulted in a marginal profit before tax of US$67 000.
In terms of the respective units, the Kadoma Tissue Mill recorded reduced factory volumes in the first quarter, as a result of low factory efficiencies and inadequate local waste collections from National Waste. Eversharp recorded a disappointing performance due to low throughput arising from factory equipment failure. The unit’s volumes were 90 percent of last period, with a resultant loss of US$49 000.
Softex turnover grew by 23 percent as a result of an increase in sales of higher value products. However, factory volumes were constant at last year’s levels.
National Waste Collections operated at breakeven in the period under review with volumes increasing by 4 percent. ART’s plantations business recorded a good performance with a 55 percent increase in turnover to US$623 000 and profit before tax of US$382 000. The group says its expects to achieve optimum recovery by the end of this year.
Online Reporter