Mishma Chakanyuka, Staff Writer 
PROPLASTICS expects to achieve significant savings in the second half of 2024 after commissioning its new solar power plant.
Board chairman Gregory Sebborn highlighted the benefits of the plant, noting that it is expected to generate 50 000 kilowatt hours (kWh) of energy per month.
“This will reduce the electricity bill and generator fuel consumption, resulting in significant savings reflected in the second half of the year,” Sebborn said in the company’s half-year financial report.
In addition to the cost savings from solar energy, Proplastics is installing new equipment to boost production capacity and factory efficiency, positioning the company for a stronger second half.
Gregory Sebborn
“Product availability will be enhanced as we are installing additional equipment to augment current capacity,” Sebborn added.
Sebborn remains optimistic about future growth, citing improving liquidity and government measures supporting the Zimbabwean dollar as key factors that could drive demand.
“The business is well-positioned to capitalize on opportunities from improved liquidity. We anticipate that the complementary measures introduced to support the ZWG currency will also help create demand for our products,” he said.
He also pointed to strong demand from the civil construction sector, which is expected to continue into the latter half of the year.
However, Proplastics reported a challenging first half of 2024, with turnover falling by 18 percent to US$8,6 million, down from US$10,4 million in the previous period.
This drop was attributed to subdued demand, resulting in an 8 percent decrease in sales volumes.
Export sales were minimal, contributing only 1 percent of total sales due to competitive pressures and currency challenges, particularly the 25 percent foreign currency surrender policy.
The cost of sales declined by 15 percent, in line with lower sales volumes, but gross profit still dropped by 24 percent to US$2,5 million, down from US$3,3 million in the previous period. Operating income also declined to US$1 million from US$1,6 million in 2023.
After accounting for normal and deferred taxes, the company reported a small loss of US$72 000.
The statement of financial position weakened as well, with total assets declining to US$22,7 million from US$24,6 million.
The current ratio improved slightly to 1,59 from 1,28, providing some cushion for working capital needs.
The gearing ratio rose to 5 percent, giving the company limited financial leverage if needed. Proplastics closed the half-year with cash and cash equivalents of US$268 000.
“Any outstanding amounts from the auction system were accounted for under receivables, not cash and cash equivalents,” Sebborn noted.
Despite these challenges, Proplastics is optimistic about the future, banking on solar power savings, new equipment, and continued demand from the construction sector to drive better results in the second half of the year. newsdesk@fingaz.co.zw
