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ART Corporation eyes region

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ART Corporation says it will venture into the region to grow its revenue and generate foreign currency after posting a profit after tax of $3,6 million for the half year to March 31, 2018 from $1,2 million on prior year.
The group’s revenue at $22 million was 45 percent higher than the prior year as all business units recorded improved sales volumes.
Gross profit margins improved to 43 percent from 40 percent in 2017.
An operating profit of $4,2 million was recorded during the period compared to $2 million posted in the prior year.
Most businesses have resorted to sourcing foreign currency from the black market because of the unavailability or limited supply of hard currency from the official market.
The impact of the acute shortage of hard currency has resulted in price increases in certain products as importers and manufacturers are faced with little choice but to pass on the cost of the currency premiums on to customers.
Commenting on the company’s financial results in a statement companying the group’s results, ART Corporation chairman Thomas Wushe said operating expenses increased as a result of deliberate brand and promotional activities as the group consolidated its gain in the local market.
Also included in the operating expenses is a provision of $0,50 million tax penalties that are under appeal in Zambia.
“The group will continue, despite the challenges of the operating environment, to explore opportunities in the region to grow revenues and generate foreign currency. Management will maintain focus on containing costs and enhancing sales generation by widening the group’s product range,” Wushe said.
The group’s business units were profitable during the period with a strong performance coming from the battery division which achieved an operating profit of $3,2 million.
“Factory sales volumes increased by 25 percent on the back of improved product availability. The benefits of the capitalisation exercise were realised during the period as battery supply challenges were addressed,” he said.
Chloride Zambia returned to profitability and posted an operating profit of $191 775 compared to a loss of $52 817 in the prior period.
The paper division recorded an operating profit of $285 016 compared to $51 877 in 2017. Notably Kadoma Paper Mills volumes were 16 percent higher than prior year.
The Softex tissue business continued to perform well and posted an operating profit of $331 298 from $150 952. Volumes increased 11 percent.
“Eversharp posted an operating profit of $931 627 compared to $519 965 in 2017 on the back of a 70 percent increase in regional sales,” Wushe said.
Timber demand was firm during the period and enabled the Mutare business to achieve an operating profit of $210 413 compared to $22 082 last year.
The group’s balance sheet grew by 28 percent due to the improved profitability during the half year. Borrowings were contained at $5,4 million while creditors decreased to $9 million from $10,3 million in 2017.
“The group net liability position reduced to $1,7 million from $4,8 million as at September 2017. Cash generated from operations was $2 million compared to $0,6 million,” he said.
The company said it was not in a position to declare a dividend as it is necessary to conserve cash in the business.
newsdesk@fingaz.co.zw

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