ZIMBABWE Stock Exchange (ZSE)-listed industrial concern National Tyre Services (NTS) profit attributable to shareholders for the six months to September rose to $478 695 compared to $336 721 recorded during the same period last year.
Report By Business Reporter
The profits were driven by a marginal growth in revenue.
Shareholders, however, resolved not to declare a dividend saying the funds would be used to ease liquidity constraints on the domestic market.
The company’s revenue grew to $8,4 million from $7,2 million during the period under review amid expectations that an increase in car sales could further spur growth.
“The revenue growth was accompanied by a growth in new tyre volumes although retreaded units were flat relative to the prior year as a result of the tight liquidity conditions,” reads the statement in part.
“The growth of the national fleet and the stable economic environment will be catalysts for further shareholder value creation.
“The company will continue to leverage on the distribution network, differentiated service and its brands will continue to focus on mitigation of financial risk.”
- Chamisa under fire over US$120K donation
- Mavhunga puts DeMbare into Chibuku quarterfinals
- Pension funds bet on Cabora Bassa oilfields
- Councils defy govt fire tender directive
Keep Reading
The company also attributed the sales growth to an ongoing branch network expansion.
During the period under review, NTS opened two branches in Chiredzi and Bulawayo.
This resulted in the company’s balance sheet growing to $8,5 million compared to $7,7 million during the same period last year.
“The liquidity constraints in the financial market had a negative impact on the growth in effective demand.
“The slowdown in economic growth put pressure on revenue targets despite the growth in the national fleet,” the statement further reads.
“Despite stiff competition in the market, margins improved slightly as a result of a greater revenue contribution from value addition services.
“The combined effect of growth in revenue and margins and cost management initiatives resulted in a 50% increase in operating profit in relation to prior year.”
