PIPE manufacturing concern, Proplastics, says operations will remain slow and painful in the post-election period.
BY FIDELITY MHLANGA
The company’s chief executive Kuda Chigiya told an analyst briefing yesterday that he was optimistic normalcy would prevail in the post-election period for the betterment of the economy.
“Post-election, we think operations to full recovery will still be slow and painful. The foreign currency situation inevitably will bite us going forward,” he said.
The demand for foreign currency, according to the company, was informed by the fact that it sources 90% of its raw materials outside the country.
In a statement accompanying its results, the company admitted that while bankers supported them in allocating the much-needed foreign currency, the amounts available were not sufficient to meet the group’s requirements.
Chigiya said construction of a modern factory currently at 55% was due for completion this October, adding this would boost production efficiency.
During the financial year ending June 30, 2018, Pro plastics posted a profit of $1,2 million up from $353 926 recorded the previous year.
Revenue grew by 71% at $10,7 million from $6,2 million, with volumes increasing by 29% buoyed by demand in the first quarter of the year.
The company said overheads grew by 39% mainly driven by the inflationary pressures in the economy and financing costs increased from $6 594 to $39 026 driven by costs incurred in establishing new facilities with banks.
During the year, earnings before interest, tax, depreciation and amortisation increased to $2,1 million from $903 322.
The company’s total assets grew to $15,3 million from $13 million during the year.
“On the outlook the company said we see a lot of orders and demands led by irrigation and mining. We anticipate export demand to pick up .We is exploring countries in the region like Democratic Republic of Congo,” Chigiya said.
During the period, the company reported a 66% growth in exports.