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Business Reporter
FARMING implements supplier, Zimplow, revenue plunged 30 percent to $8,2 million in the half year to June 2016 weighed down by weak volumes across most product lines.

The decline in revenues condemned the Zimbabwe Stock Exchange listed group to a loss for the period of $2 million, which widened from $1,8 million in the comparative period last year.

Chief executive Mark Hulett said this was despite a positive outturn in other financial aspects of the business including a 35 percent decline in operating costs. The group also saw finance costs drop 40 percent and borrowings fall by 43%.

The sum of the positive improvements resulted in a 21 percent improvement in the operating loss, which came in at $1,3 million as at June 2016, compared to the same period last year.

“The operating environment continued to be difficult in the first half of 2016.

“The impact of El Nino and the general economic environment resulted in a fairly depressed first quarter,” he said. However, revenue improved in the second quarter.

This was attributed to competitive pricing, improved service delivery and tobacco sales while tight cost control also yielded results.

“We continue to counter the depressed trading environment with focus on internal reorganisation coupled with cost control, cash management and reduction of borrowings,” he said.

In terms of segmental performance, Mr Hulett said the El Nino drought negatively impacted on sales with Mealie Brand experiencing a slow start to the year while exports were also subdued.

The group said timely price support to major distributors ahead of the tobacco season restored competitiveness of products, decongested the distribution channels and brought in cash.

Zimplow said that margins were however under pressure at Mealie Brand with average unit prices dropping by 15 percent during the half year, but volumes of ploughs rose 20 percent while total implement volumes increased by 15 percent.

The situation was not different at Farmec where tractor volumes declined by 37 percent compared to the same period last year. Overall, revenue at Farmec declined 34 percent against the prior comparative period and management has adopted cost containment measures in order to rein in on volumes decline.

At Powermec volumes of generators went down by 52 percent compared to last year largely due to the stability experienced with regards to the supply of electricity from national grid.

Volumes of earthmoving equipment at Barzem were 50 percent of the prior half year period while power units were only 28 percent of volumes for the same period the prior year. Customers preferred fleet maintenance to replacement in response to poor commodity prices and downturn in construction.

CT Bolts volumes uptake from all key sectors was below projects, but resilience of the business reflected in turnover going down only 15 percent compared to the same period last year.