Online Reporter
Nelson Gahadza
Zimplow Holdings’ flagship agricultural division, Farmec, outperformed expectations in the year-to-date (YTD) period, after revenue surpassed budget by 5 percent, and was 16 percent ahead of the same period in 2024.
Group chief executive Mr Willem Swan, giving a trading update for the period to May 31, 2025, during the company’s annual general meeting on Monday, said the strong performance came on the back of improved liquidity in the agricultural sector and a strategic push to stock and promote the popular MF200 series tractors.
“Tractor sales reached 61 units, exceeding the budget and more than doubling last year’s figure of 30 units, and implement sales were similarly impressive, totalling 155 units, which surpassed both the prior year’s and budget figures.
“This uptick is largely due to the easing of liquidity constraints following the delivery of tobacco to auction floors,” he said.
Zimplow Holdings, listed on the Victoria Falls Stock Exchange (VFEX), operates in the agricultural, mining, infrastructure equipment, services and logistics and automotive sectors through several subsidiaries.
Mr Swan said that beyond whole goods, Farmec’s after-sales division saw a 59 percent growth in revenue, spurred by the procurement of more cost-effective spare parts and a robust product support campaign.
“This development has not only deepened customer loyalty but has also significantly contributed to the business unit’s profitability,” he said.
However, he noted that despite the positive trajectory, Farmec faced challenges, particularly with increasing inventory days for parts and implements due to fresh shipments.
He added that while debtor days had improved compared to the same period last year, the company acknowledged that aggressive debt recovery remained critical to maintaining healthy cash flow.
“With the second quarter (Q2) showing continued strong momentum and an influx of confirmed orders from tobacco proceeds, Farmec is confidently projecting an even stronger Q3 performance, reinforcing its leadership in mechanised farming solutions across Zimbabwe,” said Mr Swan.
In the period under review, Zimplow revenue grew 10 percent to US$12,07 million compared to US$10,99 million in the same period in 2024.
In terms of other business units, Mealiebrand year-to-date revenue grew by 42 percent above the previous year-to-date, driven by local sales, which exceeded budget by 42 percent, while export volumes of equipment grew by 110 percent over the previous year-to-date.
Mr Swan said the group expected export orders to increase in the second half of 2025, but the influx of cheaper Indian and Chinese products into Zambia would weigh down export volumes to below those achieved in 2023.
He said gross profit was 5 percent above the previous year to date and 8 percent above budget due to procurement efficiencies, improved factory efficiencies and a stable local currency.
“Local implement volumes grew by 47 percent year to date, and local spares volumes increased by 80 percent compared to the previous period year to date.
“Export spares volumes grew by 42 percent compared to the previous year to date.
“However, export margins remain thin and competition from lower-priced Asian products persists,” he said.
Mr Swan noted June’s export order book of $128 000 while strong local demand is expected to continue.
Powermec, which specialises in the mining and infrastructure sectors, reported revenue 11 percent above the prior year, with Genset sales totalling 33 units, representing a 38 percent jump compared to the previous year to date.
“Service hours increased by 53 percent over the previous year and were 19 percent ahead of budget, while parts sales improved, being 16 percent ahead compared to the previous year to date.
“Efforts to secure new customers in the mining and agriculture sectors are a priority, and efforts to improve stock availability are ongoing.
“The current power deficit and move towards alternative energy sources will work in the business unit’s favour,” Mr Swan said.
At Tractive Power Solutions (TPS), year-to-date revenue was 17 percent above the previous year, while whole sales fell short, with 7 machines sold against a budget of 12 units.
Service revenue grew by 48 percent year to date, and parts revenue increased by 39 percent compared to the budget.
“The business negotiated a credit facility with FAW, which will aid stock replenishment.
“A new locally established original equipment manufacturer (OEM) is being negotiated for addition to the TPS stable to boost the business unit’s income streams,” said Mr Swan.
During the period under review, CT Bolts’ year-to-date revenue was 4 per cent below the prior year, but fastener volumes increased by 13 percent compared to the prior year.
Mr Swan said increased competition from Chinese suppliers had resulted in reduced margins, but the Bulawayo branch performed well, driven by mining sector orders, while Harare branches remained stagnant due to competition.
“Stock in transit expected to land in mid-July 2025 is expected to boost fast-moving stock availability and revenue,” he said.
In the logistics sector, Scanlink’s revenue was 16 percent above the prior year and 6 percent above the budget.
The unit’s bus sales totalled 15 units, exceeding the prior year and budget parts and service were 13 percent and 11 percent behind the previous year to date.
“Truck sales fell short of budget as competition from cheaper Chinese manufacturers and the general lack of medium-term financing influenced purchase decisions in favour of price only. Efforts to improve fast-moving stock availability and customer engagement are ongoing,” he said.
At Trentyre, Mr Swan said turnaround efforts were underway, with a focus on improving profitability, an effective stock replacement regime and reducing debt exposure.
