Zimplow’s Q1 in target range

LISTED agricultural implements manufacturer Zimplow Holdings’ business, was largely unaffected by Covid- 19 during the first three months of year although a difficult operating environment took some toll.

Locally, Covid- 19’s impact was felt at the very end of the quarter when Government moved to impose an initial three- week lockdown from March 30.

But the group’s Barzem subsidiary posted improved volumes during the three- month period.

The division’s equipment volumes were ahead of the prior year with 8 units sold compared to none last year, while parts sales improved by 24 percent from last year.

Service hours, however, remained at the same levels as Q1 last year, but that is likely to change for the second quarter due to the lockdown, which has since been extended indefinitely.

The Powermec division’s performance continued to improve with generator units sold being 118 percent ahead of prior year. Management said after sales business saw growth in parts by 86 percent, service hours sold jumped 192 percent to 2 105 hours during the period under review.

“The improved responsiveness to power outages by our Powermec division unlocked our elevated status as the Authorised Perkins dealer in Zimbabwe,” said Zimplow in Q1 trading update.

The group’s tractor sales at Farmec, remained at the same levels as the prior year, whilst implements volume grew by 100 percent to 40 units sold compared to the same period last year. And after-sales performances were 22 percent down from the previous year with service hours sold down 19 percent to 2,090 hours.

“We have been working closely with our principals to provide a complete range of lower horsepower tractors to boost sales volumes and we are confident that this product development will excite local tobacco farmers,” said the group.

The realignment of the CT Bolts business produced improved results during the first quarter.

Volumes were 34 percent ahead of the comparative period, while mild steel bolts improved by 39 percent and high tensile steel bolts grew by 43 percent during the period under review.

“Dry land farmers, the primary customers for Mealie Brand, were affected by drought in the earlier part of the season, and more notably by the Covid-19 pandemic that delayed the opening of the tobacco selling season, which has had an impact on Mealie Brand’s volumes.

“Furthermore, the export business experienced a 64 percent drop compared to prior year as a result of measures taken by regional governments to manage the spread of the novel coronavirus ( Covid- 19).

“Overall implements volumes have been 54 percent behind the previous year whilst, spares volumes were 47 percent behind the same period last year.”

Going forward, the manufacturer expects its business to slow due to the Covid-19 pandemic.

“Business and communities have been affected by the pandemic globally and as a business we will continue to support industry, the essential services, agriculture and mining, and people to the best we can.

“We are dedicated to the safety of our customers and employees and therefore we are following social distancing measures and other measures as required by guidance from health authorities,” said Zimplow.

“The second quarter is going to be materially affected by the Covid- 19 pandemic. We have taken steps to reduce costs and preserve capital. Other than at Mealie Brand, demand for our products remains stable.”