ART Holdings Limited – Abridged Audited Financial Results for FYE 30 September 2023

By Published On: December 28th, 2023Categories: Corporate announcement, Earnings
Art Holdings Limited 2023 Abridged Results

ART Holdings Limited ( 2023 Abridged Report


It is a great pleasure to present the financial and strategic performance of Art Holdings Limited (ART) for the year ended 30 September 2023


The economic environment continued to be extremely difficult and unpredictable as the Group had to navigate an unprecedented number of challenges. Global economies slowed and exchange rates in the region fluctuated, the local currency depreciated significantly before the authorities instituted measures to moderate money supply and liberalise the foreign exchange market. The relative stability of the exchange rate in the second half of the year resulted in improved exports and informal sector volume uptake. Demand in the formal markets was depressed whilst rising energy prices and power shortages heavily impacted the manufacturing sector. Price movements could not fully match inflation as competition from imported finished products increased.

In Zambia, the annual inflation rate at year end increased to 12% largely due to the depreciation of the local currency the Kwacha. The reduced mining output and the fluctuating metal prices led to reduced availability of foreign currency.


The Group delivered a resilient performance for the year and made good strategic progress under tough macroeconomic conditions. We continued to strengthen our dominant market position in our core energy storage business whilst work to restructure our paper divisions was being completed. The resulting simplified paper division will be able to adapt to the shifts in the market and deliver value to our customers.

Revenue for the year increased by 81% to ZWL125 billion in inflation adjusted terms compared to the prior year. In historical terms, revenue increased by 643% to ZWL 82 billion. The increase in revenue was due to the frequent price movements during the period in response to inflation and rapid local currency depreciation.

Volumes overall declined by 5% from the prior year as the improved output in the second half of the year could not overturn the impact of power induced product shortages in the first half of the year. Export volumes declined by 8% overall compared to the prior year despite a 40% growth in the fourth quarter.

Group margins improved by 9 percentage points as the recovery of cost increases from customers was supported by improved efficiencies and cost containment measures.

The Group maintained its deleveraging focus as overall third-party debt was reduced significantly. Exchange loss of ZWL56 billion was recorded with most of it emanating from the paper project debt.

Total Group revenues for the year at USD47million increased by 7% from the prior year. The Group’s brands continue to be resilient despite increased competition from imports. All the divisions were able to sell predominantly in hard currency.



Overall batteries volumes declined by 3% from the prior year due to the power challenges experienced in the first half of the year. The division performed well following improved power supply and the elimination of bottlenecks in the platemaking and charging sections where new equipment was commissioned. Volumes in the lead acid battery replacement market had a healthy demand momentum driven by growth in passenger vehicle volumes. Opportunities for trading other battery technologies including lithium were pursued through partners in order to provide customers with a wider range of products.


Paper volumes declined by 17% from the prior year as demand locally was affected by pricing distortions in the formal retail sector and the intermittent supply of raw materials. The virgin tissue produced from the newly commissioned Paper Mill was well received by the market. The paper division is now able to run two mills and two converting lines with flexibility to improve tissue softness, strength, thickness and absorbency.

The anticipated increased output and widening of pulp sources will improve cost competitiveness going forward. The division has started to realise the benefit of streamlining and consolidating the paper units. The bulk tissue export order book remained firm throughout the year however the unfavourable foreign currency retention threshold necessitated close management of the sales mix to minimise losses.

The successful retooling of the Group’s Paper business is part of a multifaceted strategy to boost profitability through constructive disruption across the Tissue value chain. The long-established stand-alone Paper chain business unit model was no longer delivering value following the shifts in the market. The consolidation of the units will deliver quality, cost competitive tissue to our valued customers. Management is confident that the work done in the Paper units has created a platform to sustainably cushion the Group in times of headwinds.


The Stationery division posted very impressive results underpinned by overall volume growth of 4% despite the intermittent power supplies at the Graniteside factory. Eversharp was able to replace the adaptor, barrel and cap moulds which had been previously held back. Production efficiencies were further buoyed by the improved availability of spares and the purchase of a new compressor.

Competition from imported products intensified and this necessitated increased marketing spend. Eversharp’s partnership with Luxor (India) helped to broaden the writing instruments product range with the introduction of the PEN PAL and PEN MATE brands.

Mutare Estates

Lumber production volumes were below the prior year as focus was on harvesting our own timber with trading contributing only 5% of the total volumes. The exploitation of the gum saw logs for pallets contributed to the improvement of margins. Crating timber demand remained firm although there were frequent price movements of structural timber in the informal sector.

Cash Generation and Liquidity

Cash generated during the year was applied to reduce debt and complete the paper projects as the Group sought to reposition the business and create a more resilient balance sheet that can withstand headwinds. There was modest capital allocation to new projects during the year. Total capital expenditure for the year was ZWL3 billion. The expected restoration of profitability in the paper segment will go a long way in contributing to the improvement of the Group’s liquidity position.

The Board resolved to dispose the unutilised land in Mutare and Kadoma valued at US$2million to improve the Group’s cash position. Property market conditions have improved significantly and the identified assets will be disposed at fair value. The company will also actively pursue the disposal of the remaining Mutare Board premises valued at US$3m in order to reduce borrowings and raise working capital for the manufacturing units.


The Group’s commitment to implement its sustainability priorities continues to be an integral part of its business strategy. The divisions extended their environmental stewardship role in the handling of lead and waste to the region. The expansion of the battery scrap network to Zambia and Malawi necessitated training and downstream engagement of the communities. During the period the Group complied with all emission regulations ensuring the well-being of both the surrounding communities and the workforce. The Group will maintain its focus on sustainable management to preserve and maximise the value of our resources as it increases the use of environmentally friendly enzymes in pulping.


The Company is not in a position to declare a dividend.


Mr Tae In Baik was appointed to the Board of ART Holdings Limited as a Non-Executive Director with effect from 1 December 2022. The Board would like to congratulate Mr Baik on his appointment and wish him every success in his new role.


The operating environment is expected to remain complex characterized by foreign exchange rate volatility and inflationary pressures. The Group will focus on value preservation, de-risking and actively managing its businesses across the formal, informal and export markets. Export sales present a natural hedge in the face of uncertain local currency volatility and changing policies. The extension of the multi-currency regime for a further 5 years has been welcomed by the market. The Group remains wary of the risk posed by the inconsistent power supply and the market arbitrage opportunities presented to competing traders through the auction foreign currency system.

At a time when the next priority of our capital allocation was to return value to our shareholders, the Board has had to acknowledge the reality and significance of the risks and uncertainties that are in the operating environment. We have chosen to take a conservative approach to create a more resilient balance sheet. The Board is confident that the Group can leverage on its brands, regional networks and people to strengthen its financial position.


It has been a difficult year and our success depends on the well-being, skills, knowledge, expertise, productivity, motivation and behaviour of our employees. We will strive to resource and thank all our employees for the unwavering support, dedication, resilience and agility to meet challenges.

I would like to express my sincere gratitude to our customers, suppliers, bankers and other key stakeholders, my fellow directors, management and the entire team at ART for the continued contribution and support during the period under review.

T U Wushe
30 September 2023

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ART Holdings Limited (

Share price: 9.00 ZiG cents (0.00 | 0.00% – 24/04/24)

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