Astra Industries, the country's leading paint manufacturer recorded a marginal 11 percent increase in profit for the year ended December 31, 2013 due to the company's cost containment strategies.
Profit for the year increased to from $1,5 million in 2012 to $1,7 million during the period under review.
Operating profit slightly increased by 2 percent from $2,20 million for year ended August 31, 2012 to $2,25 million for the 16 months to December 31, 2013.
"The operating profit was negatively impacted by increased selling and administrative expenses, in particular wages," Astra Industries Chairman Mr Addington Chinake said in a statement accompanying the company's financial results.
Revenue increased by 34 percent from $29,6 million recorded during the previous year to $39,7 million recorded by December 31, 2013.
Astra Industries indicated that the board will continue to focus on improving efficiencies and profitability by acknowledging the management for delivering commendable results despite difficult macro-economic environment.
Total assets for the company however increased by 14 percent from $21,2 million recorded by the year ended August 2012 compared to $24,3 million recorded in the period under review.
In addition total equity increased by 19 percent from $14,5 million for August 2012 to $17,3 million for the year ended December 2013.
The company said sales volumes for its paint division declined 3 percent on a comparative basis to the previous year because many construction projects were put on hold due to the July 31 harmonised elections.
On the chemicals division sales volumes grew by 9 percent but at reduced margins.
However, Astra industries said despite the growth in volumes on the chemicals side, the levels were still low due to slow recovery of the manufacturing sector and liquidity challenges in the economy.
Cash generated from operations and operating activities declined by 14 percent from $2,8 million recorded in 2012 to $2,4 recorded by December 2013 mainly due to high investment in inventory.
Astra Industries managing director Mr Mackenzie Mazimbe said the company is looking at exploiting new marketing opportunities as a result of a merger between Astra and Kansai Plascon (KP).
"In terms of export markets we are currently in liaison with Kansai Plascon Zambia and Botswana.
"At the moment more focus is on debtors management," said Mr Mazimbe.
He said Astra Industries is facing numerous challenges due to it's over reliance on limited disposable income and shrinking end user paint segment.
"Late settlements of accounts by customers and significant downsizing by manufacturing sector has partly affected our performance," he said
Exports contributed $4,8 million of which 96 percent is from chemicals division against $3,2 million recorded the previous year.
Mr Mazimbe said the company foresees a difficult 2014, due to the prevailing insufficient liquidity.
He said their prudent working capital management strategies are set to continue in this regard.
Integration with Kansai Plascon and the company is going to contribute up to 10 percent in production costs savings for the paints business.
- The Herald
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