Chemco Holdings narrows loss to $1,1m

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AGRO-CHEMICALS manufacturer and distributor Chemco Holdings Limited narrowed its loss to $1,1 million for the year-ended October 31 2012 from $2,6 million.

Report by Tarisai Mandizha

However, the price war between cotton farmers and merchants had a negative impact on demand of the group’s products.
The performance was also weighed down by the non-performance of the winter cropping.

In a statement accompanying its financial results, Chemco said liquidity constraints and the absence of alternative financing instruments had a negative impact on the capacity of the business to adequately fund operations.

Revenue decreased to $4,8 million during the period under review from $6,6 million from the same period last year.

Chemco said the improvement in the general economic outlook experienced since dollarisation continued to create a platform for the re-establishment of agriculture as a major sector underpinning economic recovery.

“The continued non-performance of the winter cropping and the price impasses between cotton farmers and merchants also had a negative impact on demand,” the company said.

The group said despite these challenges, the business managed to secure limited suppliers’ credit lines, which helped to consolidate market position in the retail distribution sector while making some inroads into contract input supply schemes.

The group turnover from continuing operations for the year was $3,48 million, which was 47% below prior year of $6,59 million.

“In May 2012, loss-making division TS Timber was disposed of. The group recorded a loss after taxation of $1,1 million for the year, which included a loss of $285 413 relating to discontinued operations. Included in the group loss is profit on disposal of TS Timber of $266 710.

“Group losses were reduced from prior year of $ 2,3 million after rationalisation of the group which saw Chemco head office being closed,” the group said.

Chemco last year closed two loss-making divisions Chemco Transport and Farm-A-Rama and Agpy through a management buy-out.