BY MISHMA CHAKANYUKA
Zimplow Holdings Limited (ZHL) says a positive performance in its Mealie Brand and Powermec divisions helped boost the group’s overall performance for the third quarter (Q3) ended September 30, 2019.
ZHL operates five business units, namely Barzem, Mealie Brand, Powermec, CT Bolts and Farmec. Mealie Brand manufactures and distributes farming implements.
“The positive performance at Mealie Brand and Powermec spurred the group’s overall performance, counterbalancing the downward adjustment in demand for products in other business units in line with economic activity. The group’s diversified portfolio showed resilience despite the drought and prevailing economic challenges,” said ZHL company secretary, Maxwell Chinorwadza, in a trading update.
“The general focus on niche opportunities and the balance sheet management resulted in the solid performance recorded by the group. In particular, Mealie Brand export performance and Powermec’s generator sales have sustained the group’s bottom line.”
At Mealie Brand, volumes were 13% ahead of prior year, while implements export sales grew by 307%, plugging the hole created by a drop in local demand of implements which was 63% down to the comparative period.
Regarding Powermac, its flagship Perkins engines saw demand grow by 85% compared to the comparable period last year.
“Service hours sold went up 28% against prior year, as Perkins engine-powered generators became the primary source of power for our customers,” Chinorwadza said.
While both Mealie Brand and Powermac recorded growths, business performance at Farmec adjusted to the general economic climate as tractor sales volume declined 45% for the nine months compared to the same period last year.
“The 2018/19 drought and the poor tobacco price yield impacted Farmec’s after sales support as parts pieces sold dropped by 31% while service hours were 24% down for the nine-month year to date,” Chinorwadza said.
“At CT Bolts, the growth in high tensile steel bolts was 86%, somewhat offsetting the 57% drop in demand of mild steel bolts resulted in the business fending the general decline in fasteners demand. The business unit’s focus remains on increasing market share with a customer centric value proposition.”
ZHL also has a 51% stake in Barzem Enterprises (Pvt) Ltd, the local representative of Caterpillar and Hyster, “world leading” manufacturers of earth moving equipment and forklift products.
“Despite the volumes for the nine months to date at Barzem trailing behind prior year, the posture of the business has improved significantly. Earth moving equipment volumes were 58% down against prior year albeit showing signs of recovery to year end. Service hours are also 24% down against prior year same period under review,” Chinorwadza said.
Despite the challenging environment, the group stated that it is on course to meet its targets for the full year ending December 31, 2019.