Hunyani Holdings Limited, which posted a profit after tax of $435 854 for the six months ended April 30, has disposed of Botswana waste collections.
The group’s revenues in the interim period were 6% up to $22,2 million compared to $20,9 million in 2011 during the same period.
Operating profit jumped 21% to $912 367.
In a statement accompanying interim results, group company secretary Keith Nicholson said the disposal of the Botswana unit followed the closure of the firm’s paper mill.
“Its (Paper Mill) contribution to profit was marginal and the full net asset value will be recovered. The proceeds on disposal will be applied to capital projects,” Nicholson said.
He said volume efficiencies at the company’s division, Corrugated Products, were badly affected by unacceptable high levels of power cuts.
“The implementation of the capital projects will result in improved efficiencies, particularly the generator at Corrugated Products,” said Nicholson.
“Hunyani intends to continue developing export markets and seasonally. Agriculture and commercial volumes will improve in the second half of the year.”
He said demand for packaging was negatively affected by liquidity challenges faced by customers and persistent power cuts.
“Commercial market volumes did not reach forecast levels, while tobacco volumes were lower due to a smaller crop size. The focus on increasing exports resulted in export volumes improving significantly,” he said.
During the period under review Flexible Products volumes were below forecasts and the grain milling industry was experiencing problems with low-cost substitutes affecting viability.
“Several customers are facing serious cash-flow difficulties. At Printopak — the division continued its recovery with recovery, with volumes increasing significantly while overheads were well controlled.
Softex achieved improved sales, but margins were lower due to an influx in competitors,” he said.
The firm did not declare dividends due to the tight liquidity conditions, capital and working capital requirements.