EVERSHARP volumes rose 19 percent to 15,18 million units in the first quarter ended December 31, 2023 attributed to improved product availability.
It also comes as the business increases its marketing expenditures in response to growing competition from imports.
The leading manufacturer of ballpoint pens, rulers, and markers is a division of Amalgamated Regional Trading (Art).
“Demand was firm and budgeted volumes could not be met due to the delayed delivery of raw materials,” Art group chief executive, Milton Macheka, said in a trading update.
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Eversharp’s partnership with Luxor (India) helped to broaden the product range with the introduction of the PEN PAL and PEN MATE brands.
During the quarter ended December 31, 2023, Art had to deal with escalating economic challenges that affected liquidity, operational expenses and the supply of raw materials.
Macheka said the export proceeds surrender requirement poses a threat to the viability of exports under the prevailing economic conditions.
He said during the quarter, market demand was subdued as local currency liquidity tightened and divergent exchange rates impacted pricing.
Art volumes, a key indicator of demand, went down nine percent during the period under review.
“…with significant reduction in paper, where the tissue converting unit was shut down for two months to allow for its relocation to Kadoma,” Macheka said.
“Export volumes declined by seven percent as paper exports were curtailed, in order to minimise the impact of the foreign currency surrender requirements given the prevailing unfavourable market rates.”
The group’s topline surged 67 percent to $58,9 billion in the quarter under review despite economic headwinds that impacted raw material availability, operating costs and liquidity.
In terms of the divisions, battery volumes declined by 14 percent from the prior year’s volumes of 91 226 units due to depressed demand and pricing challenges in the market.
Paper sales were predominantly from stock and were 53 percent below the prior year at 622 tonnes during the period.
“The expected recovery of the paper volumes following the commissioning of the new plant was unfortunately affected by adverse exchange rate volatility and shortages of raw materials,” Macheka said.
At Mutare Estates, timber volumes at 2,583 cubic meters increased by 16 percent from the prior year as demand remained firm and sawmill efficiencies improved
Macheka said the group expects the economic landscape to continue to be dynamic and complicated.
“The group will continue to implement difficult short-term measures to safeguard profitability and liquidity to enable the business to withstand an extended period of uncertainty.
“The group continues its drive to reduce short-term borrowings whilst exploring appropriate funding options for its growth initiatives for the core energy storage business,” Macheka said in his outlook.
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