By Alois Vinga
AMALGAMATED Regional Trading (ART) has suffered a 15% export volume decline on the back of acute foreign currency shortages affecting the region.
Presenting the group’s performance for the period ended September 30 2024, Art chairman, Dr Thomas Wushe said export volumes during the period were depressed.
“Export volumes declined by 15% compared to the prior year. The foreign currency shortages in the region continued resulting in significant payment delays in Zambia and Malawi,” he said.
He said during the period, the group had a difficult year and was not able to deliver the expected level of financial performance as the ongoing transformation of the business was severely impacted by the changes in the economic environment.
The bold and defensive decisions taken to scale back investment in the Paper segment during the year resulted in significant losses in the Paper divisions after taking into account once-off restructuring costs and under-recoveries.
The energy storage, timber and stationery businesses delivered resilient performances as they remain foundationally strong but power shortages during the period exacerbated product availability challenges in the peak season.
Revenue for the year decreased by 11% from the prior year due to product availability challenges and the deliberate scaling down of Paper production.
Gross profit margins at 44% improved by 2 percentage points benefiting from the change in sales mix with the slowdown of the low-margin paper volumes. Operating expenses increased as currency movements drove service providers to move to hard currency and hedge against further value loss.
The Group was relentless in its drive to fix, strengthen and reposition the business. Overall short-term bank debt was reduced substantially as proceeds from property disposals were applied towards loans. Finance costs remained relatively high, reducing by 6% from the prior year.
“We anticipate that the market conditions will remain unpredictable and challenging as the underlying economic problems are being addressed.
“The Board remains confident that the ongoing restructuring efforts and decisions taken will see the gradual strengthening of the Group and increased agility in taking of opportunities identified in all our business units,” added Wushe.
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