Nqobile Bhebhe
Zimpapers Business Hub
ZIMPLOW Holdings is accelerating its diversification towards mining, export markets and non-agricultural business lines to cushion earnings against a potentially severe El Niño-induced downturn in the 2026/27 cropping season.
This follows a broad profitability improvement across several of its business units.
The industrial and agricultural equipment group is prioritising investment in stock, sales support and cost containment while protecting working capital, as it seeks to consolidate the recovery recorded across its businesses and reduce dependence on climate-sensitive agricultural demand.
The strategy comes as the group’s operating units registered stronger performances in equipment sales, aftermarket services, solar products and mining-related supplies, providing alternative revenue streams ahead of a cropping season expected to face adverse weather conditions.
In its latest trading update for the third quarter and nine months ended September 30, 2026, the group said, “The board is encouraged by the relatively stable macroeconomic conditions, which are expected to be sustained to the year end.
“However, the 2026/27 cropping season is expected to be affected by the projected strong El Niño weather pattern, which may have a severe effect on the Group’s agriculture-related Business Units.
“The group is seized with a drought-proofing and diversification strategy which includes, among other initiatives, broadening the product offering with a focus on the mining sector and extending the export sales drive to other markets.”
The emphasis on diversification reflects the need for businesses supplying agricultural equipment to develop more resilient revenue streams, particularly when drought threatens farmers’ production, incomes and capacity to invest in machinery and implements.
Mining offers an important alternative market, given its demand for heavy-duty tyres, transport equipment, engineering products and industrial supplies. Export markets also provide opportunities to broaden the customer base beyond domestic agricultural cycles.
Zimplow’s business units are already showing signs of this transition, with mining-related demand supporting Trentyre and Mealie Brand, while solar products are emerging as a stronger contributor to Powermec’s sales.
Farmec remained the group’s largest contributor to profit, with revenue increasing by 25,7 percent to US$10,11 million and profit before tax surging by 151,9 percent to US$565 297.
The business unit recorded a 14 percent increase in tractor sales to 122 units, while implement sales rose by 23,8 percent to 369 units. Parts revenue increased by 24,6 percent to US$1,73 million, while workshop hours grew by 20 percent to 9 218 hours, although service revenue declined by 1,6 percent to US$653 237.
“The financial performance from Farmec reflects customer confidence in the key brands distributed by the Business Unit (BU),” the group said. “In the period under review, the BU focused on an aggressive product support drive and on refining its supply chain to provide competitive pricing and secured attractive supplier-related lines of credit.”
However, Farmec’s exposure to agricultural customers leaves it vulnerable to a deterioration in farming conditions, reinforcing the importance of developing complementary business lines.
Mealie Brand has made progress in this direction, returning to profitability as export sales and mining-related revenue offset pressure in its domestic agricultural market.
Revenue increased by 16,1 percent to US$3,43 million, while the business unit moved from a loss before tax of US$43 347 in the prior year to a profit before tax of US$96 321.
The group said, “The board’s strategy of reducing the unit’s dependence on the local agricultural market, to protect it from the shorter El Niño and drought cycles now being experienced, has produced positive results.”
Export revenue grew by 42,8 percent to US$1,15 million, supported by a 46,4 percent increase in implemented export volumes to 9 461 units.
Revenue from the mining segment, which the unit did not serve in 2025, reached US$459 843, accounting for 13,4 percent of its revenue. The gains came against a decline in local revenue, which fell by 15,4 percent to US$1,81 million as domestic implement volumes dropped by 33,9 percent to 7 150 units.
Parts sales volumes increased by 7,2 percent in the domestic market and by 44,7 percent in the export business, pointing to the growing importance of aftermarket demand and regional market penetration.
Trentyre also recorded a significant improvement, with revenue rising by 29,8 percent to US$2,18 million.
Although retread revenue declined by 13,6 percent to US$445 108 because of first-quarter supply chain challenges, new tyre sales revenue increased by 66,7 percent to US$1,43 million.
The growth was led by off-the-road and farm tyres, with volumes increasing by 66.8 percent to 522 units on orders from the mining sector.
“The gross margin improved by 5,1 percentage points to 30,8 percent. As a result, the BU is on a recovery path, with its loss before tax reduced by 95,7 percent to US$12,027,” the group said.
The performance demonstrates the potential for mining demand to support earnings even as the group manages supply chain pressures and uneven demand across its markets.
Meanwhile, Powermec returned to profitability, recording a profit before tax of US$30 362 against a loss of US$65 334 in the prior year, as revenue increased by 10 percent to US$2,75 million.
Solar and accessories revenue more than doubled, rising by 118,7 percent to US$604 852 and accounting for 22 percent of the unit’s sales.
In the commercial vehicle segment, Scanlink recorded a 212 percent increase in profit before tax to US$402 218, despite revenue declining by 1,1 percent to US$5,31 million.
Truck sales more than tripled to 34 units, although bus sales declined by 20 percent to 16 units from 20 in the prior year.
After-sales business supported the improvement, with parts revenue increasing by 30.7 percent to US$2,47 million and service revenue rising by 15,3 percent to US$1,04 million.
“The gross margin improved by 7.2 percentage points to 27,9 percent, benefiting from the increased parts and service revenue,” the group said.
C.T. Bolts also returned to profitability, with revenue growing by 5,3 percent to US$964 333 on tonnage that increased by 5.9 percent to 253 tonnes.
The business unit recorded a profit before tax of US$63 798, compared with a loss of US$761 in the prior year, as operating expenses declined by 16.8 percent to US$354 891.
Its gross margin, however, eased by 1,8 percentage points to 52,1 percent amid price competition from imported fasteners.
Beyond the immediate trading improvements, Zimplow is pursuing a potentially significant expansion through an acquisition.
The group has issued a cautionary statement advising stakeholders that it is in the final stages of negotiations for the acquisition of a business operating in an industry related to the group.
The proposed transaction could broaden its product offering and strengthen its presence in key economic sectors, although details of the target business, transaction value and funding arrangements have not been disclosed.
