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Zimplow registers US$12,07m revenue in first 5 months

Local News
DIVERSIFIED firm, Zimplow Holdings Limited (Zimplow) has recorded a 10% increase in revenue to US$12,07 million in the first five months of the year as it reorganises its business model.

DIVERSIFIED firm, Zimplow Holdings Limited (Zimplow) has recorded a 10% increase in revenue to US$12,07 million in the first five months of the year as it reorganises its business model.

Zimplow operates in the agricultural, mining, infrastructure equipment, services and logistics, and automotive sectors through several subsidiaries.

Owing to economic turmoil, the firm has implemented a turnaround strategy to retain its revenue-earning potential and return to profitability.

This comes after the firm posted a loss of US$2,16 million for its annual financial period ended December 31, 2024.

Speaking during a trading update for the first five months of the year at the firm’s annual general meeting in Harare yesterday, Zimplow chief executive officer Willem Swan said the group was instituting model stock holding.

Model stock holding refers to the ideal or recommended quantity of inventory that a business should keep on hand to ensure smooth operations, avoid stockouts and minimise excess stock.

“The group recorded revenue for the year to date of US$12,07 million, a 10% increase compared to the same period in 2024 (US$10,99 million). Gross profit was 2% below the previous year to date,” Swan said.

“The group continues to liquidate slow-moving, high-value spares and whole goods stock at Farmec and TPS, while instituting model stock holding based on current and seasonal demand. Debt recovery initiatives will continue, and tighter control of debtors will be instituted.

“Cost containment continues through purposeful examination of all administrative costs and supplier evaluations.”

The Zimplow boss expects the prevailing tight market liquidity conditions to ease in the second half of the year, while current ZiG stability and access to foreign currency from export proceeds by Mealie Brand bode well for group recovery.

“GDP [gross domestic product] is forecast to be between 5,2% and 6% as the country recovers from the 2023/4 drought and off the back of foreign investment in the mining sector,” Swan said.

“Overall, management is quite confident that the group will continue to climb back to positivity.”

During the period, local implement volumes grew by 47%, while local spares volumes increased by 80% compared to the previous period year-to-date.

For Farmec, under its agriculture division, Swan said year-to-date (YTD) revenue was 16% higher than the previous year, with tractor sales reaching 61 units, exceeding the previous year by 30 units.

“Strong performance has been seen in Q2 with expectations of an even better Q3, leveraging on tobacco auction sales and confirmed orders. At Mealie Brand, YTD revenue was 42% above the previous year to date,” Swan said.

Mealie Brand is also under Zimplow’s agriculture division.

“Local sales exceeded budget by 42%, while exports volumes of equipment grew by 110% over the previous year to date,” Swan said.

“The group expects export orders to increase in the second half of 2025, but the influx of cheaper Indian and Chinese products into Zambia will temper export volumes to below those achieved in 2023.”

Meanwhile, under its Powermec subsidiary, revenue was 11% above the previous year, as Genset sales totalled 33 units, 38% higher than the previous YTD.

Service hours increased by 53% over the previous year and were 19% ahead of budget, while parts sales improved, being 16% ahead compared to the previous YTD.

Swan said efforts to secure new customers in the mining and agriculture sectors were a priority, and efforts to improve stock availability were ongoing.

He added that the current power deficit and move towards alternative energy sources would work in the business unit’s favour.

“On Trentyre (automotive subsidiary), revenue was 35% below the previous year. Retread volumes increased by 8% compared to last year. Operating expenses were 27% below the previous year and 2% below budget year-to-date,” Swan said.

“Turnaround efforts are underway, with a focus on improving profitability, an effective stock replacement regime, and reducing debt exposure.”

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