16 May 2014

Zimbabwe: Astra in Drive to Grow Paint Exports

Astra says working capital management and cost control will remain the key focus area after aggregate volumes in the four months to April declined 5 percent over last year.Speaking at the annual general meeting on Wednesday, managing director Mr Mac Mazimbe said Astra's performance in the first four months mirrored the conditions prevailing in the economy.

"The economic and business environment is known to everyone. However, we have in place a number of initiatives to grow exports of paints as well as capitalise on the strategic alliance with the new shareholders (Kansai Plascon)."

He, however, added that there would not be immediate results from the foray into the region as the group is not competitive in the target export markets.

Aggregate volumes declined 5 percent compared to last year while the slight recovery by 2 percentage points in the gross margin resulted in sales revenue declining by 3 percent translating to 23 percent of F13 turnover.

Mazimbe said gross profit values were ahead of last year by 3 percent with the margin recovering to 32 percent from 30 percent mainly due to the performance of the chemicals division.

Operating expenses were flat resulting in the group posting a 3 percent operating profit margin for the period compared to 1 percent last year.

The group is currently operating around 35 percent capacity with the chemicals division enjoying a 40 percent market share.

Meanwhile at the AGM directors fees for the period were approved at $85 000 while auditors fees were also okayed at $185 000. - FinX.

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