ART posts $651 000 operating profit

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Amalgamated Regional Trading (ART) posted an operating profit of $651 000 for the half year ended March 31 2015 compared to a loss of $266 000 last year attributed to an increase in sales volumes.

BY VICTORIA MTOMBA

In a statement accompanying the group’s financial results, ART chairman Moses Chundu said production in sales volumes improved across all divisions as a result of the first phase of the recapitalisation exercise particularly in the second quarter of the financial year.

Revenue increased by 5% to $14,8 million compared to last year while margins improved by 2% to 33%.

Profit before tax for the group stood at $23 000 from a $991 000 loss.

“Eversharp posted a profit before tax of $176 000. This was, however, lower than prior year as a result of raw material shortages in the first quarter. The automatic pen assembly and ink filling machines were commissioned in December resulting in production efficiencies and cost savings in the second quarter,” Chundu said.

The group recorded a 115% increase in cash generated from operating activities to $2,3 million and this was due to tight working capital management and improved performance by the businesses in the second quarter.

Chundu said the batteries division posted a profit before tax of $370 000 and volumes at the factory were 53% higher than last year due to improved performance in the industrial business unit.

“The consolidated paper division posted a loss of $212 000 compared to a loss of $492 000 in 2014.The new equipment which was commissioned in December 2014 resulted in improved quality and consequently, volumes increased by 13% from prior year in both Kadoma Paper Mills and Softex,” Chundu said.

ART’s group debt stood at $8,1 million and $628 000 of the cash generated was utilised to pay interest.

“The balance sheet remains highly geared and focus in the next half will be to find a conclusive solution to the debt situation and directing efforts to return to profitability in all business units,” Chundu said.

He said the group expects the macroeconomic environment to continue to be difficult in the short to medium term.

Chundu said plans were underway to automate the manufacturing business in the medium term and a commitment haD already been made to increase capacity at Eversharp by year end.

1 COMMENT

  1. Congratulations to management and their team..Now get Mutare Board and paper in the groove and conquer the local bourse!

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