Astra records 36pc growth
Bus4

Mr Chinake

Business Reporter
Zimbabwe Stock Exchange listed paint manufacturer, Astra Industries recorded a 36 percent growth in the bottom line to $604 000 for the six months to June from $444,000 following a slight growth in revenue and declining finance costs.Revenue for the period slightly went up two percent to $14,7 million from $14,5 million recorded in the comparative period last year. An improvement in revenue came on the back of improved aggregate volumes on the paints division.

“The operating environment deteriorated during the period under review. Liquidity challenges continued to adversely affect business activity impacting demand for our products due to low disposable incomes of consumers and cash constraints of customers,” said Mr Addington Chinake, Astra Industries chairman in the results statement.

Aggregate volumes were six percent below the comparative period to 30 June 2013 while operating profit margins improved to six percent primarily due to cost to income ratio reduction of two percentage points.

The resultant profit before tax increased 46 percent to $0,830 million from $0,568 recorded in the comparative period last year.

“Liquidity challenges have made working capital management difficult. The company’s exposure to trade debtors has increased with some customers not adhering to approved credit terms.

“The group however managed to maintain positive cash flows,” said Mr Chinake.

He said the chemicals division’s performance was adversely affected by the downturn in the manufacturing sector, resulting in sales volumes declining by 17 percent.

Revenue for the division declined five percent due to product mix.

Mr Chinake said revenue for the paints division was four percent up mainly due to the distribution of Plascon paints brand in Zimbabwe thereby increasing customer choice and product range.

He said steady progress in integration with Kansai Plascon is being achieved for the paints division resulting in cost efficiencies, improved procurement and technical support.

Mr Chinake said a mandatory offer to minorities resulting from the acquisition in July last year of a majority shareholding previously held by Finance trust of Zimbabwe by Hemistar Investments and Kansai Plascon  is in progress.

The period under review realised the synergies anticipated between the Group and Kansai Plascon and the benefits of associating with a multinational, Kansai Plascon is expected to yield further benefits in the foreseeable future.

Mr Chinake said the board and management will continue to exert their efforts in achieving optimal cost efficiencies in preserving and growing the group’s respective market shares.

 

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