Harare — ZIMBABWE Stock exchange-listed Celsys Limited suffered a US$635 000 operating loss as operating expenses ran ahead of turnover in the 14 months to August.

Celsys reported that net operating costs totalled US$737 546 compared to revenue of only US$714 194, as the group could only manage US$103 000 gross profit.

However, the group recorded a US$28 624 loss after taxation.

The company blamed its poor performance on a number of factors including the decline in the use of cheques, decrepit equipment and diminishing printing business.

Celsys said its traditional markets had virtually disappeared as the cost of printing airtime cards rose disproportionate to tariffs, sub-zero tariffs affected payphone operations and cash shortages limited use of ATMs.

In the face of the challenges it faces in a changing economic environment Celsys said it aimed to grow its business through exports and strategic alliance with Celsys Zambia. As airtime tariffs improve the firm faces stiffer competition, but management plans to counter it through innovative approaches and value added products.

The company has also expanded its operations from security printing to commercial printing, which has presented its fare share of challenges being a new venture.

The company said it had been ill equipped to compete in this arena, but has addressed challenges through human resource training and appointment of key personnel.

Celsys also indicated that it had acquired new equipment in the form of a four-colour printing press, a two-colour printing press and two single colour printing presses.

In addition, Celsys said it had ventured into new products in its traditional markets where it is now issuing point of sale devices to banks on a lease model and the planned introduction of prepaid voucher devices.

This would also see the commencement of the distribution of what the company termed the HTC Smartphone brand of handsets. "The company has built a solid physical and human resources that put it in a strong position as we enter 2010. Reinvention of the company was a continuous process to match evolving conditions in the telecommunications and financial sectors to leverage its strength to provide goods and services into the sectors, Celsys said.