Zimbabwe: Zimplow Half-Year Earnings Impacted By Covid-19

30 September 2020

Diversified mining, construction and agricultural equipment manufacturer and distributor, Zimplow endured a tough six month trading period to June 30, 2020 due to supply chain disruptions from Covid-19 lockdowns, recording a 12 percent revenue jump in inflation-adjusted terms from comparable period last year.

The Covid-19 pandemic had an impact on the Group's working hours but somehow recovered lost ground as lockdown rules gradually relaxed.

Revenue for the period grew to ZWL$ 479 million from ZWL$ 428 million in comparable period prior year.

The Group posted a profit after tax of ZWL$140 million from ZWL$134 million, recording a 5 percent increase.

Barzem, the group's subsidiary posted a 145 percent revenue gain to ZWL$ 222 million.

"The unit sold 13 CAT whole goods in the first half compared to 2 in the same period of the prior year. After sales business parts and service hours were also ahead of the previous year by 3% and 19% respectively despite losing hours to the COVID-19 induced lockdowns," the Group said.

CT Bolts also continued its recovery with a 73 percent growth in revenue to ZWL$22 million.

The unit achieved 21 percent volume growth compared to same period last year. The operating profit for the unit was also up 25 percent to ZWL$10.6 million.

Powermec revenues were flat at ZWL$52.2m with generator sales at the same level as last year.

"The after sales business showed improvement with parts sales 10% ahead of prior year in real terms and service hours sold 111% ahead of the prior period. The efficiency of our service delivery is a prime focus for the business together with the roll-out of our sustainable energy and hybrid energy solutions," said the Group.

Farmec achieved a resilient performance with the operating profit for H1 growing to ZWL$72m from ZWL$62m prior year.

This growth was supported by the implements sales volumes which were 35% ahead of prior year.

Tractor volumes were 28% behind prior year at 33 units sold.

"We are encouraged by the reception of the MF Global Series range of tractors by the Zimbabwean farmers and the subsequent arrival of lower range horse power tractors just after H1," said the company.

The Group's food segment, Mealie Brand performance for the first half was sharply down mainly due to the lingering effects of last years' drought and limited access to regional markets.

The Group could not declare interim dividend due to the need to conserve cash for an uncertain short term.

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