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Enacy Mapakame
Business Reporter
Zimplow Holdings Limited’s overall performance for the five months to May 31, 2023 registered steady growth supported by growth in some units and improved capacity albeit the challenging economic environment.
The economic headwinds, characterised by exchange rate volatility and inflationary pressures had an adverse impact on sales of equipment during the period.
“The uncertainties in the monetary system and wait-and-see approach as we approach the national elections, have significantly reduced investment in capital equipment by some of our key customers,” said group chief executive officer Vimbayi Nyakudya on the sidelines of the group’s 73rd annual general meeting held in the capital yesterday.
However, the group’s diversified structure helped reduce the impact of the slowdown in demand as group revenue – excluding Barzem operations – was 4 percent ahead of the same period in the prior year. According to the group, Scanlink, Powermec and Trentyre all recorded significant growth in revenues.
Under the Agricultural equipment, Mealie Brand’s local sales volumes of local implements jumped 70 percent although the export performance was subdued falling by 38 percent.
“The good performance on the local market had an equally offsetting effect on the export shortfall as revenue was level against prior year whilst the business unit swung from a loss position in the prior year to profit during the same period under review,” said Mr Nyakudya.
Farmec sales increased by 15 percent while after-sales performance continued to improve with a 3 percent growth from prior year. However, tractor volumes went down 34 percent in comparison to the same period last year as farmers were adjusting to the constrained trading environment.
The logistics and automotive equipment segment, Scanlink, experienced significant improvement in the delivery of wholegoods in the period under review.
According to the group, trucks and bus sales were 50 percent ahead of prior year’s performance. Service hours and parts recorded negative variances of 2 percent and 14 percent respectively, in comparison to prior year performance.
At Trentyre, volumes in retreads for commercial tyres recorded a growth of 23 percent in comparison to the same period in the prior year.
The increased factory capacity of 33 percent improved production levels. New tyre volumes were 10 percent below prior year’s performance due to constraints in the supply chain.
As for the mining and infrastructure equipment, Tractive Power Solutions (TPS) has channeled its efforts towards market penetration and establishment of market visibility.
At Powermec, generator sales and service hours increased by 43 percent and 13 percent respectively in comparison to the same period last year driven by the need for alternative power sources as the grid continued to experience persistent electricity outages.
CT Bolts’s revenue recorded a 6 percent growth in comparison to the same period last year supported the mining sector largely.
As for Barzem, the group continues to pursue the acquisition of the 49 percent stake currently held by Barloworld Equipment UK.
Going forward, management at Zimplow is focusing on cash generation, cost containment and balance sheet preservation.
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