ART will focus on value preservation, de-risking and actively managing its businesses across the formal, informal and export markets.
MANUFACTURER and distributor ART Holdings Limited will turn to exports as a hedge against further exchange rate volatility in 2024.
ART manufactures and distributes products in paper, stationery, and batteries.
In a statement accompanying the financial results for the year ended September 30, 2023, ART chairperson Thomas Wushe said the firm expects foreign exchange rate volatility and inflationary pressures to continue.
ART will focus on value preservation, de-risking and actively managing its businesses across the formal, informal and export markets, he said.
“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,” Wushe said.
He said revenue increased by 81% to ZWL$125 billion compared to the prior year.
“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,” Wushe said.
“Export volumes declined by 8% overall compared to the prior year despite a 40% growth in the fourth quarter. Group margins improved by nine percentage points as the recovery of cost increases from customers was supported by improved efficiencies and cost containment measures.”
He said the group maintained its deleveraging focus as overall third-party debt was reduced significantly.
“Exchange loss of ZWL$56 billion was recorded with most of it emanating from the paper project debt. Total group revenues for the year at US$47 million increased by 7% from the prior year,” Wushe said.
During the period under review, battery volumes declined by 3% owing to power cuts, while paper volumes declined by 17% due to pricing distortions and shortages of raw materials.
For its stationery division, volumes grew by 4% owing to the availability of spares and the purchase of a new compressor.
The increased revenue allowed the firm to more than double its profit after tax to ZWL$12,25 billion during the period under review, from the 2022 comparative.