Zimplow’s doubles FY19 profits

Harare, (New Ziana) – Zimplow, one of the country’s biggest farming implements manufacturer, said on Wednesday its inflation adjusted profit for the year ended December 2019 rose two fold to $100.62 million from $35.45 million in 2018, on the back of improved sales.

Revenue increased by 85 percent to $504.11 million from $272.97 million the previous year.

“Through a good mix of exports and local products sold, the company was able to surpass prior year profitability in real terms,” group chairman Thomas Chataika said in a statement.

Operating profit was up 158 percent to $122.32 million from $47.39 million in 2018.

As expected due to the inflationary pressures in the market, administration expenses rose to $75.96 million from $45.95 million in 2018.

Chataika said volume performance was mixed across the group.

Farmec topline went up by 74 percent to $172.1 million from $99.1 million in the previous period. The business sold 104 tractors which was down 37 percent when compared to 2018. In the same vein, parts and implements sold declined 22 percent on prior year.

However, the division contributed 44 percent to group profit at $44.6 million.

Mealie Brand’s revenue rose 61 percent to $112.8 million from $70 million. Export sales was up 62 percent on prior year.

“Export sales enabled the division to have exchange gains while also providing foreign currency for other group companies,” Chataika said.

After tax profit for Mealie Brand increased two fold to $55.9 million from $17.1 million in the prior year.

Small power generators sold at Powermec doubled to 102 from 49 in 2018 driven by power cuts. Service hours sold surged by 28 percent to 3 840. Revenue grew one fold to $51.6 million from $22.9 million in 2018. Profit was up from $1.4 million in 2018 to $4.1 million.

CT Bolts revenue increased by 59 percent to $16.2 million from $10.2 million. But overall volumes declined 26 percent to 299 tonnes but there was a trade-off in sales volume mix with high tensile steel bolts up 151 percent and mild steel down 51 percent. However, profit after tax declined from $1.9 million to $493 000.

Barzem’s turnover surged to $150.6 million from $71.2 million. Profit increased eight fold to $36.3 million from $4.1 million in the prior year.

Chataika said the division represents the biggest growth opportunity for the group over the coming few years.

“The demand pipeline remains strong and ongoing efforts are being made to ensure that we carry sufficient stocks on hand,” he said.

Total assets for the group nearly doubled to $512.88 million from $267.87 million in 2018.

The group declared a dividend of 3.78 cents per share.

“We remain nimble and maintain a malleable balance sheet,” Chataika said.
New Ziana