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TYRE manufacture, National Tyre Services recorded a drop in net profit to US$351 000 in its half year ending September, 2013 from US$479 000 in the prior period due to competition and reduced product demand.Group revenue slightly dipped to US$8,43 million from US$8,47 million as the liquidity crunch added to the trading difficulties.
The group opted not to declare a dividend citing the need to conserve cash. Basic earnings per share also dropped to US$0,14 from US$0,19 in the comparable period.
“Revenue declined by one percent over the prior comparable period due to fewer trading days, a sales mix skewed towards lower value products, reduced effective demand in a crowded market space and stringent debtors management,” NTS said.
“Margins shrunk as a result of the intense industry competition and the sales mix.”
Other factors which impacted on performance, NTS said, included the general elections held in July and declining productivity in major economic sectors.
The tyre manufacturer said the increase in light motor vehicles in the country had however helped up demand for new tyres.
Zimbabwe has since dollarisation in 2009 witnessed an unprecedented increase in the import of light motor vehicles mostly from Japan and the United Kingdom.
The group also benefited from tyre rethreads which grew eight percent.
NTS said it would implement new marketing initiatives to drive sales and improve group performance in the second half of its financial year. — New Ziana.
Online Reporter