THE Reserve Bank of Zimbabwe (RBZ) will this year sell its stake in Zimbabwe Stock Exchange-listed manufacturing concern Astra Industries, which posted a $496 952 after tax profit for the half year to February, as the central bank discontinues quasi fiscal activities, the company has announced.
Report by Bernard Mpofu.
The central bank, through its investment arm Finance Trust of Zimbabwe, holds 63% equity of Astra.
Since dollarisation, the debt-ridden RBZ has been winding its non-core business.
Astra recorded a profit of $751 412 in comparative to prior year.
The group’s basic earnings per share declined to 0,35 cents from 0,51 cents.
“The process by the major shareholder, Finance Trust of Zimbabwe, to dispose their entire stake in the company is on-going and may be concluded in the second half of this financial year,” said the company in a statement.
Revenue increased by 4%, while aggregate sales volumes grew by 3% over the same period last year.
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Gross margins declined from 35% last year to 33% this year. Operating profit at $615 875 is below prior period by 44%.
The group achieved a profit before tax of $620 867, down 43% from last year’s $1 098 460.
Group managing director Mackenzie Mazimbe yesterday told NewsDay Business that the company’s earnings had nosedived due to depressed margins and rising operating costs.
He said depressed sales for the group’s flagship unit, Astra Paints, which recorded a 4% dip in revenue compared to the same period last year, had affected profitability.
“We did not grow the topline to compensate for the decline in margins due to competitive pressure at our trading and manufacturing business. Our operating costs also rose due to NEC negotiated wages, Mazimbe said.
“We have plans to resume a number of projects we have put on hold to grow our topline. To grow our revenue we are considering doing more business in the region and at the same time effecting more cost containment measures.”
The group’s total assets turnover, a measure of how much assets are being used to generate sales, stood at 0,7. The efficiency is below 1, showing under-utilisation of assets which might be due to the pricing policy in light of stiff competition.
Finance costs declined to $53 904 from $91 353 during the period under review.
The company also announced that in March, Lobels issued an unsecured five-year convertible debenture in settlement of its debt to Astra Chemicals with a maturity amount of $103 436.
The group’s current ratio, which measures the company’s ability to meet current liabilities, stood at 1,99, a figure above the standard minimum of 1.
