National Tyre Services’ (NTS) operating profit rose 72% to $888 997 for the full year ended March 31 2012 on the back of growth in new tyres.
New tyre volumes were up 17% buoyed by an increase in the contribution of high value truck and off the road tyres.
Revenues rose to $15,9m from $11,3m during the comparative period.
During the period under review, NTS re-opened two branches in Chiredzi and Kwekwe to increase its visibility on the market.
“Capacity utilisation in Harare Truck Retreading factory increased in the current year.
“This resulted in the re-opening of the of the Bulawayo factory in February 2012 in order to decongest the Harare factory and offer improved turnaround time to the Bulawayo market,” said NTS in a statement accompanying its financial results.
NTS said the growth in the national fleet and mobile plants offered the group opportunities to grow its revenues and market share.
It however warned that the anticipated increases in rubber and oil prices, coupled with unreliable energy supply, would have a negative impact on pricing and margins.
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The company also attributed the growth in revenues to efficient supply chain management, a wider distribution network and brand awareness.
“Despite pressures on overheads linked to the electricity tariff, distribution costs and wage increases as well as facilities and plant refurbishments, operating profit increased by 72% over prior year as a consequence of various productivity enhancement initiatives and strategic cost management,” NTS said.
