ZSE-listed manufacturing concern, Radar Holdings has posted an increase in operating profit of $389 000 for the four months ending October from $304 000 due to the high margins from the first bricks, a company official has said.
The company’s chief executive officer Elias Hwenga said the company was operating at 89% capacity although its performance was being hindered by water and electricity shortages especially in Bulawayo.
Radar Holdings revenue increased to $3,1 million during the period under review.
“We also recorded a profit due to the control of our overheads especially the head office that used to be large. We hope to increase our output of bricks to 60 million from 50 million using the current capacity. Our main challenge has been water supply and electricity costs. Bulawayo has shortages of water to individuals and construction has slowed down,” Hwenga said.
Hwenga said turnover has been low since the elections. However, he said the company was not yet worried about the profitability as they were producing the bricks.
“Liquidity is an issue like anybody else tenure of loans and the cost of money is high. We are looking for funding. We are not increasing the debt,” Hwenga said.
Radar Holdings turnover increased by 11% to $9,2 million from $8,2 million in 2012 although after-tax profit from continuing operations declined in 2013 to $2,28 million.
In 2013 the company said its major cost drivers were employment, energy and repairs and maintenance and it was commendable that these were under control.
Employment costs increased by 5% and the group is in the process of streamlining the management structures to ensure productivity is benchmarked against international best practices.
“The group’s energy electricity, fuel and coal bill was contained but remain a significant concern with respect to regional competitiveness. There are efforts in place to ensure that there is efficient consumption of energy throughout operations,” Hwenga said in the 2013 annual report.