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Zimplow revenues up despite Covid-19

BY TAURAI MANGUDLA

LISTED farm equipment manufacturer Zimplow defied the odds to report a 5% after-tax growth and 12% revenue increase in the first half of 2020 despite Covid-19 disruptions, which saw most companies operating below capacity.

Revenues showed resilience coming in 12% ahead of last year in inflation-adjusted terms from $428 million to $479 million, while after-tax profit went up 5% to close the first half of 2020 at $140 million.

The positive profit and revenue performance came after four of the group’s units —Barzem, CT Bolts, Powermec and Farmec — reported growth in revenues.

In a statement accompanying the company’s condensed interim results for the period ended June 30, Zimplow chairman Thomas Chataika said Caterpillar dealer Barzem’s revenues went up 145% to $221 million after the unit sold 13 CAT whole goods in the first half compared to two in the same period of the prior year.

Barzem’s after-sales business parts and service hours were also ahead of the previous year by 3% and 19% respectively despite losing hours to the Covid-19-induced lockdown.

Zimplow’ steel bolts and nuts producer, CT Bolts, also recorded a 73% growth in revenue to $22 million after achieving 21% volume growth compared to the same period last year.

“The operating profit for the unit (CT Bolts) was also up 25% to $10,6 million” Chataika said.

Chataika added: “Farmec achieved a resilient performance with the operating profit for H1 growing to $72m from $62m prior year.

“This growth was supported by the implements’ sales volumes which were 35% ahead of prior year.

“Tractor volumes were 28% behind prior year at 33 units sold.

“After-sales parts and hours sold dipped 13% and 29% respectively.”

Farmec distributes Massey Ferguson tractors, generators, engines and combine harvesters.

It was only the group’s plough and machinery unit, Mealie Brand, whose performance in the period under review was sharply down compared to the same period last year, Chataika said.

Mealie Brand’s local and export implements volumes were 62% and 84% down on prior year, respectively.

“This was mainly due to the lingering effects of last year’s drought and limited access to regional markets,” Chataika said, adding the first two trading months after half-year end were, however, showing a recovery in business revenues.

The group said the outlook was cautiously positive supported by good leads in the construction and mining industry as well as the government’s focus on the performance of the agriculture and mining sectors.

As a result, the group remains optimistic for expansion and focused on growth opportunities.

At farmec, Chataika said, the group was encouraged by the reception of the MF Global Series range of tractors by the Zimbabwean farmers and the subsequent arrival of lower-range horsepower tractors just after June.

At CT Bolts, Zimplow said, focus into the future would be on product spread while realigning distribution channels.

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