Zimpapers Logo

Michael Tome Business Reporter
Zimbabwe Stock Exchange listed company — National Tyre Services (NTS) Limited, says it expects demand for its products and services to “remain” despite the obtaining turbulent business environment.

In the half year results up to September 2019, the tyre making firm highlighted that although operations remain difficult, it foresees continued demand for its products and services.

Just like a considerable number of local based companies, NTS indicated that it was not spared from foreign currency deficiency and crippling power shortages that negatively weighed down on operations.

Resultantly, the challenges, coupled with wearing demand saw NTS posting an inflation-adjusted loss of $1,8 million for the six months to September 2019.

However, the tyre making concern is upbeat that its operations will turn out positive going forward.

“Despite these challenges, we are optimistic that our strengths as a retailer with a wide branch network country-wide, and subsequent cash injection, will enable us to withstand the harsh economic environment,” said James Moyo, the NTS board chairman in a statement accompanying the half year results.

On the other hand, the company says its retail operations were affected by currency reforms in the period under review, which led to price increases, negatively affecting product demand.

The $1,8 million loss recorded in the half year results is a slide from a $110 723 profit recorded in the comparable period in 2018.

Its revenue dipped 15 percent to close the period under review at $31,4 million from $38,8 million realised prior period due to constrained capacity utilisation and a nosedive in sales volumes.

The said period saw National Tyre Service’s total assets decrease by 13 percent to $32 million from $37 million attributable to a reduction in current assets.

Last October the Public Accountants and Auditors Board (PAAB) announced that all listed companies were now required to publish their financial results using hyperinflation accounting based on the International Accounting Standard (IAS) 29: Financial Reporting in Hyperinflationary Economies as the country qualified for hyperinflation reporting from that time.

The declaration makes it mandatory for all companies to prepare and present financial statements for periods that ended on or after July 1 2019 to apply the IAS 29 Financial Reporting in Hyperinflationary Economies.