HARARE -Art Corporation reported a 384% growth in revenue in functional currency terms, in the third quarter to June as batteries continue to be the mainstay of the business.
In inflation adjusted terms, revenue grew 39% compared to the same year ago period.
In a trading update, chief executive Milton Macheka said batteries (Chloride) saw improved product availability with volumes rising in tandem at 37%. However other business units were severely impacted by the Covid-19 pandemic.
Macheka noted the persistent pressure on margins during the period which was responded to through increased focus on cost containment and efficiency improvements.
Overall group volumes for the quarter were up 52% and export earnings were marginally ahead of the prior year with paper export volumes into the region showing signs of recovery.
Sales volumes in the nine months to June were 15% ahead of prior year.
The paper segment, which is comprised of Kadoma Paper Mills, National Waste Collections and Softex, saw an 11% increase in volumes compared to the prior year. However, the segment had seen logistical and raw material supply constraints due to the delay
in payments from the foreign currency auction. This necessitated commercial downtime with major repercussions on operating efficiencies, fixed cost absorption and profitability.
Macheka said following the completion of the Softex acquisition in May, the group is now focused on streamlining and capitalizing the paper business silo and replacing antiquated equipment.
“The business still believes in the underlying strength of its core paper business segments and the capital expenditure commitments taken will ensure recovery when fully implemented.”
Eversharp volumes for the quarter recovered 255% compared to the prior year which
had limited trading because of the hard lockdown. The business continues to breakeven
with improved volumes across the market despite the continued uncertainty of the school
Timber volumes increased by 27% as demand remained firm.
Going forward, Macheka said focus will be on consolidating performance within the region while preserving liquidity, lowering costs and reprioritizing strategic growth actions.