ZIMPLOW Limited recorded a loss of $1 million in the year to December 2012 attributed to restructuring, merger and acquisitions costs, the company said last week.
Report by Nqobile Bhebhe
A month ago the firm warned shareholders that profits in the full-year to December 31, 2012 would be lower compared to the corresponding period the prior year owing to low disposable income, thin margins from exports and inherited expensive debt from Tractive Power Holdings Limited (TPHL) business unit.
The group recorded revenue of $35 610 823 enhanced by the acquisition of TPHL.
“Operating profit of $1, 78 million was well below what was achieved by Zimplow Limited alone in 2011 due to pressures on spares margins and sales mix between local and exports at Mealie Brand.
“However, the group ended up with an attributable loss of $1 005 176 due to restructuring, merger and acquisition expenses which are non-recurring,” said the group.
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In the period under review, Mealie Brand recorded a 10% decline in total volumes due to “a negative swing in local implements volume sales”.
Exports implements volumes were 13% ahead of prior year. The group said CT Bolts, which incorporates Tassburg products, the units for the division measured in kgs declined by 7% while those measured in units dropped by 12%.
However, the group wants to consolidate its leadership as the agriculture and mining equipment supplier of choice.
“The group is well positioned to take advantage of the current rehabilitation of equipment taking place in roads, mining, rural councils, and sugar and tea estates. Tobacco prices appear to be firm and this, coupled with a positive regional outlook, should see the agricultural division improving.”
Zimplow completed the takeover of TPHL after shareholders of both firms approved the acquisition of the remaining 42% in the latter company.
The approval of the transaction by shareholders means TPHL becomes a wholly owned subsidiary of Zimplow, which held a 57% stake in the firm before the latest transaction.