Art turnover softens on turbulence

Amalgamated Regional Trading Holdings (Art) says its turnover dropped by 20 percent during the five months to February due to political instability in the country. Zimbabwe experienced violence demonstrations in January over fuel price hikes and deteriorating economic situation, which left at least 12 people dead and hundreds others injured. 

Tension has been rising in the southern African country since October when government separated bank accounts for RTGS$ and major currencies resulting in official inflation surging to a post dollarisation high of 56 percent for January, from 5,4 percent in September.

“It has been a packed five months, starting off with the events in October, with the monetary and fiscal policy announcements affecting the business especially in terms of trading,” Art’s chief executive Milton Macheka said at the company’s 17th annual general meeting in Harare recently.

“Turnover for the period stood at $23 million after sales across the business softened by about 20 percent. We had some disturbances during the public unrest in January. Our trading was subdued during that period, in fact in other instances it completely stopped,” he said.
The group’s gross margins for the period were down to 41 percent against 44 percent in the previous comparable period. Macheka noted that challenges have continued in the environment especially with respect to access to foreign currency and the depressed demand.

The chief executive, however, noted Art’s toilet paper manufacturing unit did well during the period under review. “The business recorded some growth,” he said. Art manufactures and distributes products in three categories, namely paper products, stationary and batteries. 
Its product portfolio, which falls under the brand names Exide,

Eversharp, Softex and Chloride, ranges from tissue paper, sanitary ware and disposable napkins to writing pens and automotive, solar and standby batteries. Despite the decline in revenues, the company says it is confident of surpassing its revenue targets for the current trading year.

“We had initially budgeted to top $50 million in terms of turnover for the end of the year and we are confident that we will be able to do that,” Macheka said. He said exports remained strong during the period under review “especially in the battery business and paper at Kadoma Paper Mills”.  

Macheka said the company was still assessing the possible impact of the recent Monetary Policy Statement. “We are still monitoring the situation to be able to make a proper assessment of the impact as the year progresses but we are still hopeful that we should be able to better our forecasts,” he said.

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