BY MISHMA CHAKANYUKA
ZIMBABWE’S largest distributor and retailer of new tyres and tubes, National Tyre Service Limited (NTS) says it experienced reduced demand in the first quarter of the year as businesses and consumers adjusted to the challenging economic environment.
In the company’s trading update for the period ended June 30, 2019, company secretary Stewart Mandimika said the volume of tyres sold during the quarter decreased by 51% compared to the same quarter last year.
“The trading environment was characterised by continued shortages of foreign currency, steep increases in year-on-year inflation and reduced aggregate demand as businesses and consumers adjusted to the challenging environment. Productivity was negatively affected by power outages,” Mandimika said.
Zimbabwe’s economic environment has remained challenging since September last year, characterised by foreign currency shortages, inflation, incessant power cuts, water shortages and fuel price increases.
The group’s year to date revenue improved by 133% to $8,6 million and was 42% above the company’s budget.
Apart from tyre retailing, the company does tyre retreading, wheel alignment and wheel balancing.
Under the retreading line volumes went down 10% compared to that recorded in the previous year.
The company remained profitable and positive cash flows were generated by the business in the quarter under review.
Mandimika said the group expects the trading environment to remain the same in the short-term. NTS recently refurbished its Cripps Road branch in Graniteside, Harare into a bigger and modern shop to become the company’s flagship branch. Samora Machel Avenue and the Kelvin road Graniteside retail branches, also in Harare, got a facelift too.