Chemco mulls re-listing

HARARE - Agro-chemicals manufacturer and distributor Chemco Holdings Limited (Chemco) plans to re-list on the Zimbabwe Stock Exchange (ZSE).

The group was suspended from the bourse in August last year.

“The board and the majority shareholder are working on the resolution of the suspension,” Chemco said, adding an update will be provided in three months’ time.

It said it was “still engaged in discussions on a transaction that may have a material impact on the value of the company’s shares.”

This comes as Chemco — which has been trading in the red since adoption of the multi-currency system in 2009 — narrowed its losses to $1,1 million from $2,6 million in the year-ended October 31, 2012.

However, the price war between cotton farmers and merchants had a negative impact on demand of the group’s products.

Performance was also weighed down by the depressed winter cropping.

Chemco noted that liquidity constraints and the absence of alternative financing instruments had a negative impact on the capacity of the business to adequately fund operations.

During the period under review, revenue decreased to $4,8 million during the period under review from $6,6 million from the same period last year.

The agriculture chemicals company said the improvement in the general economic outlook experienced since dollarisation continued to create a platform for the re-establishment of agriculture as a major sector underpinning economic recovery.

“The continued non-performance of the winter cropping and the price impasses between cotton farmers and merchants also had a negative impact on demand,” the company said.

Despite these challenges, the group said the business managed to secure limited suppliers’ credit lines, which helped to consolidate market position in the retail distribution sector while making some inroads into contract input supply schemes.

Turnover from continuing operations for the year stood at $3,5 million, 47 percent below $6,59 million registered prior year.

“In May 2012, loss-making division TS Timber was disposed of.

“The group recorded a loss after taxation of $1,1 million for the year, which included a loss of $285 413 relating to discontinued operations.

“Included in the group loss is profit on disposal of TS Timber of $266 710.

“Group losses were reduced from prior year of $ 2,3 million after rationalisation of the group which saw Chemco head office being closed,” the group said.

Chemco last year closed two loss-making divisions Chemco Transport and Farm-A-Rama and Agpy through a management buy-out.


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