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PG Industries narrows loss

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PG Industries remained in the negative despite narrowing its loss in the first six months of the year, after being weighed down by low merchandising and high interest burden.

PG Industries remained in the negative despite narrowing its loss in the first six months of the year, after being weighed down by low merchandising and high interest burden.

By Business Reporter Loss after tax for the half-year to June 30 was down to $2,7 million from $3,1 million over the comparative period last year.

  Net revenue was down 16% to $15,2 million attributed to the non-consolidation of Manica Board and Doors (MBD).

  Gross sales declined 12% to $10,5 million.

  In a statement accompanying its interim results, PG said PG Timbers and PG Mozambique posted an impressive growth in sales.

  As part of efforts to improve working capital, PG said it would be disposing some of its assets.

  “The board also approved the following initiatives to start addressing the group’s working capital and gearing challenges; disposal of properties not being utilised by PG businesses with a book value of $5,1 million and disposal of the remaining investment in an associate company and recovery of loan investment in the associate company with a combined book value of $4,3 million,” read part of the statement accompanying the results.

  PG said the company would soon conclude a product supply agreement with a supply chain management to recover the group’s import requirements.

  “Discussions are in progress to conclude a long-term business process outsourcing (BPO) agreement.

  “Successful conclusion of the BPO agreement will have material impact on the medium and long-term performance of merchandising and glass divisions,” the company said.

  PG Industries Zimbabwe shareholding in MBD declined to 27,9% from 60% after the recapitalisation of the company to the tune of $10,4 million by way of a rights issue that the former failed to participate in.

  During the period under review, Zimtile commissioned a brand new roofing tile factory while the glass division underperformed owing to its inability to consistently source adequate volumes of glass.