Zimplow to shed foreign liabilities, strengthen balance sheet

Zimplow Holdings

LISTED mining and agriculture implements maker, Zimplow Holdings is geared towards strengthening its balance sheet by reducing foreign liabilities and repositioning the group to deliver earth-moving equipment through a new original equipment manufacturer.

In a statement accompanying financial results for the half-year ended June 30, 2021, Zimplow revealed that  it would continue to leverage on its diversified structure to boost its performance despite the economic challenges prevailing in the country.

“The group remains focused on realigning the working capital position given the need to rely on internal resources arising from increased lead times, delayed remittance of auction funds and reduced demand following the liquidity squeeze driven by monetary policy measures. The group is geared on strengthening its balance sheet position by reducing foreign liabilities, and repositioning the group to deliver earth-moving equipment through a new original equipment manufacturer or supplier.” Zimplow said in the statement.

During the period, the group recorded growth in revenue of 24% compared to prior year driven by positive operational performance and volume growth in its key segments.

Profitability was 64% ahead of prior year spurred by a 12- fold increase in exchange and fair value gains.

“In addition, the group is pushing ahead on its commitment to the mining and infrastructure equipment sector and will soon introduce a new corporate brand to service the market’s earth-moving equipment needs in line with our customers’ expectations,” the company said.

Zimplow agricultural equipment unit — Farmec — delivered a strong volume performance with tractors at 22% ahead of prior year while tractor-drawn implements were 3% up on the prior period.

Zimplow said efforts to improve throughput and capacity at workshops through work studies resulted in a 73% growth in hours sold when compared to the same period last year.

Mealie Brand posted a 26% volume  decline in animal-drawn implements compared to the same period last year. The spares volumes for the local market, however, registered a 35% growth against the same period last year as farmers sought to apply their reduced disposal incomes to equipment maintenance rather than replacement.

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