Art back in the black

HARARE - Zimbabwe Stock Exchange-listed diversified group, Amalgamated Regional Trading (Art), has returned to profitability after recording losses in the past few years.

The group’s chairman, Thomas Wushe, yesterday said Art achieved a $1,9 million profit in the full year to September 2016 compared to a loss of $590 000 in the same period last year.

“Revenue at $29,8 million was at similar level as prior year while margins improved to 37 percent compared to 2015 margins of 35 percent,” he said adding that this was a result of reduced manufacturing costs arising from factory automation and purchasing efficiencies. 

In the period under review, the group’s operating expenses were 13 percent lower than last year due to Art’s restructuring and cost containment strategies implemented during the previous year.

“Operating profit increased by 93 percent to $3,7 million. The interest expense of $1,2 million still remains a significant strain on the business,” Wushe said.

The Art boss noted that the group generated $5,5 million from operations with the cash being applied to the recapitalisation of factories and repayments of expensive short-term debt.

“Consequently, the debt has come down to $5,9 million compared to $7 million in prior year,” he said.

Art’s batteries division continued to perform well in the 12 months to September contributing 66 percent of the group’s revenues.

“In Zimbabwe battery sales volumes went up by nine percent from 2015 levels. Chloride Zambia’s performance was however, affected by reduced economic activity in the run up to the elections and as a result, volumes in Zambia dropped by 32 percent compared to prior year,” Wushe said.

Overall, the group’s battery division recorded an operating profit of $2,9 million from $1,2 million in 2015 — representing an increase of 142 percent.

Despite registering commendable results in the stationery and timber divisions, Art decided against declaring a dividend.

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