PLASTIC pipe manufacturer, Proplastics Limited (Proplastics) overturned its loss-making position to post a profit after tax of US$348 168 in its half-year period ended June 30, 2025, owing to a 12% increase in revenue.
In the prior 2024 period, Proplastics registered a loss of US$71 875 owing to a higher income tax expense against its profit before tax.
In a statement attached to its financial results for the half year ended June 30, 2025, Proplastics chairman Gregory Sebborn said the firm earned revenue of US$9,6 million.
“Turnover for the first half of the year increased by 12% to US$9,6 million compared to US$8,6 million in the prior period, with export sales contributing 3%,” he said.
“The revenue increase was driven by a 14% growth in sales volumes, reflecting an improvement in demand for our products.
“Cost of sales increased by 4%, resulting in a gross profit increase of 30% to US$3,2 million compared to US$2,5 million in the prior period.”
He said operations continued to be severely impacted by erratic electricity supply, with frequent load-shedding and power failures disrupting production schedules and necessitating the deployment of the expensive generator to maintain product availability.
“This had an impact through increased conversion costs and the consequent reduction in margins,” Sebborn said.
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“However, contribution from the solar plant continued to mitigate the power supply challenges.”
In terms of costs and expenses, these amounted to US$2,43 million during the period under review, up from the prior year’s US$2,02 million.
This covers other expenses, distribution costs, administrative expenses, and impairment loss on trade receivables.
The statement of financial position also remained stable, with total assets amounting to US$24,7 million during the period, compared to US$22,7 million in the prior period.
“The current ratio closed the period at 1,74 from 1,59 in the prior period. The gearing ratio decreased to 11% from 14% in the prior period,” Sebborn said.
“At this level, the gearing ratio still provides some leverage, if required, to bolster working capital requirements. The group closed the half year with cash and cash equivalents of US$235 000.”
Hence, the budgeted capital expenditure for the period to December 31, 2025, has been set at US$1,53 million, to be financed from internal resources and existing facilities.
“We expect a significant uptake in demand for tanks, piping, and fittings as major projects, including those under the government of Zimbabwe’s fiscal initiatives, commence during the dry season.
“Having invested in boosting our tank production capacity in the third quarter, the business is positioned to capitalise on growing demand for tanks and accelerated sales growth.
“While electricity supply uncertainties may impact our production process, our backup generator and installed solar capacity will minimise downtime and ensure business continuity during power outages.”
However, Sebborn said frequent unscheduled interruptions to electricity supply continued to drive up production costs, and consideration was being given to additional investments to mitigate the impact of such interruptions.
“Raw material prices are expected to remain stable throughout the year, and we continue to monitor the environment for possible local supply options given tensions growing in international markets.”
