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Astra records 11% increase in after-tax profit

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ASTRA Industries Limited has recorded 11% increase in after-tax profit to $1,7 million for the 16 months ended December 2013 due to growth in revenue.

ASTRA Industries Limited has recorded 11% increase in after-tax profit to $1,7 million for the 16 months ended December 2013 due to growth in revenue.

BY TARISAI MANDIZHA BUSINESS REPORTER

In the period under review, revenue grew by 34% to $39,7 million from $29,6 million recorded for the year ended August 31 2012.

Operating profit increased to $2,3 million, finance income grew to $144 433 from $41 185 on prior period while finance costs declined to $141 000 from $195 000 in 2012. Speaking at the company’s analyst briefing yesterday, Astra Industries managing director Mackenzie Mazimbe said sales volumes on average grew 3% over last year.

Exports contributed $4,8 million with 96% being chemicals against $3,2 million in 2012.

“We foresee a difficult 2014 due to insufficient liquidity. Our prudent working capital management strategies would continue in this regard,” Mazimbe said. “Integration with Kansai Plascon (KP) is ongoing and we expect this to contribute up to 10% in production costs savings for the paints business. In January and February, Astra was still profitable.”

Mazimbe said sales volumes on comparative basis declined by 3% last year primarily due to the fact that a number of construction projects were put on hold due to the harmonised elections.

He said competition in the sector was intense driven by both local producers and importers.

He, however, said revenue was 8% down on budget, but ahead of last year and the group’s cost containment or reduction opportunities would be taken advantage of during the year.

Mazimbe added that the cash generated from operations and operating activities had declined mainly due to high investment in inventory. Astra Industries Ltd is a Zimbabwe Stock Exchange-listed entity, born out of the demerger of the Astra Limited Group in February 2001.

In July 2013, Hemistar and KP acquired the Reserve Bank of Zimbabwe stake of 63% in Astra Industries. Effectively KP has 50,5% shareholding in Astra.