HARARE – Zimbabwe Stock Exchange-listed diversified concern, Art Corporation (Art), says its operations are being constrained by a $17 million debt.
The group’s chairman, Thomas Wushe, on Thursday said Art’s total borrowings are at $6,5 million and the creditor’s balance of $10,7 million remained a challenge to the business that is trying to stay afloat under the current harsh economic environment.
Despite the debt, Art posted a profit of $892 000 in the half year to March 2016, compared to a loss of $114 000 recorded prior comparable period.
In the six months under review, the paper division recorded a profit before tax of $22 000 compared to a loss of $220 000 in 2015 as Kadoma Mills volumes grew by three percent on the back of high uptake of tissue at the group’s Softex tissue factory.
Pen sales at Eversharp grew two percent on prior period as production costs arising from the recapitalisation efficiencies also came down resulting in higher margins and a profit before tax of $464 000 compared to $176 000 prior year.
The group’s plantations in Mutare posted a loss before tax of
$168 000 on the back of a $174 000 fire loss recorded in October 2015.
Wushe said the second phase of recapitalisation at the group’s Chloride factory was expected to be completed by year end, enabling the battery maker to make more of the product.
He said the group’s battery division had been performing well, despite a poor overall group performance which saw Art post depressed revenues.
“The batteries division posted a profit before tax of $985 000 due to six percent increase in factory sales volumes and steady sales at Battery Express as well as higher factory efficiencies at the Chloride factory,” Wushe said.
He however, pointed out that margins were affected by lead international prices which were depressed for the major part of the period under review.
Art’s subsidiaries, Eversharp, Chloride and Kadoma Tissue Mills, are operating at 80 percent, 60 percent and 17 percent of their capacity respectively.