Chairman Oliver Chidawu says the group achieved “exceptional performance” last year, helped by massive demand from the central bank.
Central bank governor Gideon Gono ordered over 100 000 ploughs during the mechanisation programme and Zimplow as the largest player in the industry got a huge share of the order, among other farming implements.
“The group results for the half year ended June reflect profit after taxation of US$283 000,” he said. “The profit could have been higher had group sales volumes been at the same levels of last year.”
Chidawu says what could have been an otherwise “quiet” year is showing signs of recovery buoyed by private sector distributors.
“It is worth mentioning that the local market which we expected to be very quiet throughout 2009 is starting to show signs of recovery as private sector distributors, which were badly affected during the price control era, strive to re-establish themselves.”
Chidawu added: “This is very encouraging and Mealie Brand is offering credit to selected customers to facilitate this development. The local market decline against the prior year can be attributed to the exceptional performance in the prior year as a result of the RBZ mechanisation exercise. The mechanisation sales came during what is normally a very quiet off-season period.”
Sales however fell 62% in the same period compared to last year, Chidawu said. CT Bolts’ sales also suffered in the group’s bolts division. Volumes fell 65% compared to last year while sales units were 15% down.
Zimplow hopes CT Bolts and Tassburg will contribute 50% to the group’s turnover going forward.
“When Zimplow took over CT Bolts, it was envisaged that the traditional business that is now Mealie Brand would only contribute roughly half of the group turnover,” he said. “With prospects of an economic recovery in Zimbabwe now growing, this vision should become a reality in the next few years as the fasteners business recover.”
Turnover stood at US$2 million while profit after tax was US$147 949. Basic earnings per share (EPS) stood at 5 cents.