Listed agro-industrial firm Zimplow Holdings Limited is optimistic that there will be an improved performance across all its business units in full-year 2020 buoyed by various initiatives it has put in place.
This follows a mixed performance across the group in full-year 2019, which saw Powermec and Mealie Brand increasing their volumes, while Farmec, Barzem and CT Bolts suffered a decline.
Through a good mix of exports and local products sold, the company was able to surpass the prior year’s profitability in real terms. Zimplow CE Vimbayi Nyakudya told businessdigest the change in Farmec’s market dynamics towards a certain range of horsepower affected volumes in 2019.
“This has since been resolved with the support of our principal and will boost our volumes in 2020. At Barzem, the efforts that we have put through together with our principals and partners, including the appointment of a substantive general manager to boost performance, are really paying off. We expect the volumes performance to improve in 2020,” he said.
During the period, Farmec revenues were up from ZW$99,1 million to ZW$172,1 million as the business sold 104 tractors, which was down 37% from 2018.Parts and implements sold were down 22% on prior year. While the unit contributed 44% of the group’s profitability after tax at ZW$44,6 million.
Mealie Brand had a strong year with revenues up from ZW$70 million to ZW$112,8 million, with the division benefiting from strong export sales, which were up 62% on the prior year.
Export sales enabled the division to enjoy exchange gains, while also providing foreign currency for other group companies. The business achieved after-tax profit of ZW$55,9 million up from ZW$17,1 million.
On the other hand, Powermec benefitted from electricity shortages with its generator sets doubling sales from 49 to 102. Revenues grew from ZW$22,9 million in the prior year to ZW$51,6 million.
In terms of profitability, the unit improved from ZW$1,4 million in 2018 to an after-tax profit of ZW$4 million.For CT Bolts, overall volumes were down 26% to 299 tonnes. However, there was a trade-off in the sales volume mix with high tensile steel bolts up 151% and mild steel down 51%.
While Barzem’s turnover went up from ZW$712 million to ZW$150,6 million. After-tax profit came in at ZW$36,3 million up from ZW$4,1 million in the prior year.
Nyakudya said CT Bolts was expected to improve.
“As an organisation, we have constantly worked on refining our capabilities, having a strong balance sheet, one that is able to withstand economic shocks, and having the right human capital, with the right skill and experience in the markets we operate in. We are further sharpening our product development. In so doing, we are not only focussed on building a resilient organisation, we are also building one that is able to grow,” he said.