HomeBusinessART posts $1,1m loss as turnaround prospects dim

ART posts $1,1m loss as turnaround prospects dim

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AMALGAMATED Regional Trading (ART) says prospects for economic turnaround remain low for 2015 with the company posting a loss of $1,1 million for the year ended September 30 2014.

VICTORIA MTOMBA
BUSINESS REPORTER

The group incurred the loss in 2014 compared to a profit of $399 000 recorded in 2013.

In a statement accompanying the group’s financial results, ART chairman Passmore Matupire said the current constrained economic environment would provide an opportunity to reorganise business models, commission new plants and strengthen the brands competitiveness.

“Your board anticipates the current difficult macro- economic environment to show further signs of fragility as we enter the year 2015. The expected prospects for economic turnaround will therefore remain low for the financial year to 30 September 30 2015,” he said.

Matupire said the group traded in a difficult environment with liquidity constrains and poor market demand.

Revenue for the group was 5% lower to $28,7 million compared to $30,2 million same period last year.

Capacity utilisation levels for the Eversharp division increased by 4% to 82% during the 12-month period to September 30 2014 and is expected to increase its output going forward.

Matupire said overall capacity utilisation declined to 59% from 65% the previous year and sales revenues were lower across most of the business units with an average volume decline of 11% in batteries and 17% in tissue operations while Eversharp volumes grew by 5%.

“Eversharp performed well, with capacity utilisation up by 4% to 82%, revenue up 10% to $4,6 million and net earnings before tax up 3 000% from $7 000 in 2013 to $217 000,” he said.

“The division is expected to increase its contribution to group’s earnings on a sustainable basis with the commission of the Ball Pen Auto Assembly machine in January 2015.

“The commissioning of the new machine will see a significant reduction in cost of production which should improve margins and profitability in the coming year.”

Matupire said the company has started to draw down on the approved facilities offered by Taesung Chemical Company Limited of up to $3 million to finance raw materials purchases and up to $15 million to finance capital expenditure over a period of five years.

He said the group had begun accessing the funds and new equipment had already been received in the country and some would be commissioned next year.

Matupire stepped down as Art chairman after serving the board for 12 years.

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