Almot Maqolo, Staff Writer 
VICTORIA Falls Stock Exchange (VFEX)-listed diversified manufacturing firm Zimplow Holdings is optimistic that various business strategies lined up for this year will withstand strong headwinds arising from the EI Nino-induced drought and falling commodity prices.
Zimbabwe’s agriculture-based economy is expected to take a massive hit from this year’s drought which has already been proclaimed a national disaster compounded by waning global mineral prices that are likely to see its major foreign exchange generating sector- mining- record subdued earnings.
The group which also distributes global brands in the agriculture, mining and infrastructure, logistics and automotive industries has been hampered by rising operating costs thinning its profit margins.
The drought is already ravaging power generation capacity at Kariba which is likely going to affect output in productive sectors.
“The group is expected to face headwinds in FY2024 as a result of the El Nino induced drought and the corresponding downstream effect thereof, the harsh economic operating environment which is likely to persist into 2025 and the impact of the soft mineral prices resulting in mines retreating or delaying expansion and capital expenditure spending,” acting group chief executive, Willem Swan said in a statement accompanying the financials.
It also comes as miners have called on the government to intervene, warning that softening mineral prices are weighing down the viability of mining projects. “However, the group is insulating itself from the effects of these macro-economic factors,” Swan said.
“Management is confident that through executing its factory capacitation, the successful launch of the newly acquired Original Equipment Manufacturers’ (OEM), the strategic business turnaround of the loss-making entities as well as embarking on a groupwide cost containment program, it will show commendable growth in revenue generation and profitability in 2024.”
The group’s revenue declined 28 percent to US$32,07 million in 2023 compared to US$44,24 million in 2022. “The late onset of summer rainfall in the 2023/4 cropping season dampened demand in the agricultural cluster, and the impact of the economic headwinds resulted in a contraction in customer spending across the group,” Swan said.
newsdesk@fingaz.co.zw
