Zimplow Holdings Q3 2021 revenue and profitability up 62% and 61% respectively

By Published On: November 15th, 2021Categories: Corporate announcement, Earnings


Zimplow Holdings Limited (ZIMW.zw) Q32021 Interim Report

INTRODUCTION

The Group recorded a resilient performance in the third quarter with volumes increasing across all business units despite headwinds from Covid-19 lockdown restrictions and a challenging trading environment. Third quarter (Q3) Group revenues grew by 45% and profitability was 61% up in real terms compared to the prior year same period. On a year-to-date basis, revenue and profitability were ahead of prior year by 62% and 61% in real terms, respectively.

Trading Environment

Q3 was characterized by a challenging trading environment with month-on-month inflation growing by 1% to 4.73% in September 2021 compared to June 2021. Growth in economic activity driven by firm global metal prices, increased government expenditure on road rehabilitation projects, and improved output deliveries from the just ended 2020/21 agricultural season provide a foundation for improved economic performance given the right interventions.

OPERATIONS

Farmec

The unit maintained good growth momentum, driven by firm demand in tractors, implements and aftersales performance pushing up revenue for the nine months by 82% compared to same period last year. Tractor and implements sales volumes grew by 86% and 56% respectively against same period last year. Parts sales and capacity utilisation also improved by 19% and 26% respectively, against prior year. The unit continues to focus on improving customer experience through an information systems-based strategy, the right people and collaborative parts procurement systems.

Mealie Brand

Local and export implements sales volumes for the nine months were 37% and 30% ahead of prior year respectively. The projected normal to above normal rainfall for the 2021/22 summer season and the recovery of export markets owing to the easing up of lockdown measures in the region provides a boost for Mealie Brand performance as we enter the fourth quarter of the 2021 financial year. Going forward, management will continue to focus on capacity expansion and improved factory efficiencies to reduce the impact of global raw material costs push factors.

Barzem

Barzem delivered a 42% growth in volumes of earth moving equipment for the nine-month period under review. Workshop efficiencies improved by 50% compared to same period last year.