Monetary measures bearing fruit –NTS

Business Writer

LISTED tyres supplier, National Tyre Services Limited, says the prevailing monetary measures are bearing fruit as evidenced by the firming of the Zimbabwe dollar against the greenback.

Interventions that authorities have implemented include tightening the monetary policy, liberalising the exchange rate regime, fine-tuning the auction system as well as transferring external sector obligations from the Reserve Bank of Zimbabwe to Treasury.

Last week, the exchange rate was at US$1: ZWL$4,542 from the previous week’s rate of US$1: ZWL$4517.

In a statement for the financial year ended March 31, 2023, National Tyre Services (NTS) said: “The monetary measures being implemented by the Government to stabilise the local currency are bearing fruit given that the local currency is firming against the US dollar.

“Foreign currency exchange rates are stabilising on parallel and auction markets. We are cautiously optimistic of continued stability in exchange rates, which will aid planning and business growth.”

It said industry is expecting that the prevailing stability in power generation would continue to minimise production disruptions.

“We are projecting increased demand for tyres and related products and services to pick up in the build up to general elections and the upcoming agricultural season.

“To capitalise on the obtaining environment, NTS will continue to focus on cost containment and enhanced market outreach programmes to increase the inventory turnover ratio and improved profitability,” it said.

During the period under review, NTS sales revenue grew by 21 percent (inflation adjusted) to $4,332 billion (2022: $3,579 billion) due to the continued implementation of the turnaround strategy.

Gross profit decreased by 8 percent to $2,462 billion (2022: $2,686 billion) as the cost of sales increased due to higher costs of imported products.

“Total operating expenses were maintained at prior levels (inflation adjusted) at $2,170 billion (2022: $2,181 billion) due to cost containment measures implemented by the management.

“The company incurred a loss (before tax) of $427 million (inflation adjusted) from a profit of $1,187 billion in the previous year,” said NTS.