HUNYANI Holdings Limited posted a $219 684 loss for the six months ending April 30 due to a 9% decline in revenue during the period under review.
Victoria Mtomba
In a statement accompanying the group’s results, company secretary Keith Nicholson said revenue stood at $18,9 million down compared to $20,9 million recorded over the same period last year.
“Revenue was adversely affected by shrinking domestic demand, with the bulk of tobacco packaging off-take set to commence in the second half of the year. The prior period profit was largely driven by gains on property disposals,” Nicholson said.
Nicholson said liquidity constraints would remain a challenge in the second half of the year and demand for commercial product was expected to be subdued.
He said tobacco volumes were expected to increase along with exports and this should positively affect the group results.
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“External competitors are aggressively targeting our markets and although operations are profitable margins are under pressure. In the outlook period Hunyani will be focusing on reducing overhead costs, closely managing working capital and improving efficiencies,” he said.
Nicholson said the group recorded capital expenditure of $451 000 and this was due to plant upgrades.
Group operations Corrugated Products and Cartons & Labels’ domestic and commercial volumes were depressed, while Flexible Products volumes were affected by increased competition which was partially offset by firmer demand for tobacco packaging.
Cartons & Labels’ performance improved from the utilisation of new equipment installed last year.
For the full year ended December 31 2013, operating profit stood at $2,2 million up from $1,6 million in 2012, while profit before taxation stood at $1,9 million up from $1 million. Revenue for the group in 2013 went up by 5% to $47,7 million.
The group said performance of the company was affected by low levels of liquidity that reduced the demand for packaging products.