Proplastics Limited profit for 2017 increase by 100% to US$1 358 448 from US$679 221 in 2016 despite the country meeting challenges relating to cash.
Zimbabwe has been facing liquidity challenges and foreign currency shortages since 2016.
“The operating environment presented many challenges throughout the year,” said Gregory Sebborn, the company’s chairman. “The most significant of these challenges were the persistent liquidity constraints throughout the 12 months period, and in the second half of the year, a rapidly declining availability.”
“Whilst our bankers have supported us remarkably well with foreign currency allocations for the most of the year, turnover was negatively impacted towards the end of the reporting period as we failed to secure sufficient allocations to allow factory operations to meet the demand for our products.”
Turnover is the amount of money taken by a business in a particular period.
Chief Executive Officer (CEO) of Proplastics Kudakwashe Chigiya of Proplastic said the company posted yet another solid financial performance in the year ended 31 December 2017.
“Turnover grew by 14% to $16 103 935 on the back of a 5% growth in volumes and a 9% increase in average selling prices,” the CEO said.
“Borrowings reduced from US$916 000 in prior year to close the year at US$374 667.”
“Cash generated from operations improved to 26% from 19% of revenue driven by the reduction in receivables and growth in creditors,” Chigiya goes on. “The Group therefore closed the year with a healthy balance of US$4 396 251.”
The chairman also said the company hopes the policy reforms were promised by the new government will materialise and improve economic activities in the country
“We witnessed significant political changes towards the end of the year, with a new administration promising to revitalise the economy through a raft of policy reforms,” Sebborn said.
“We hope that these intended reforms will materialise so that economic activity improves.”
The current government in the country, which calls itself the “New Dispensation” promised to create an environment to attract investors using the mantra “Zimbabwe is open for business”.
Companies have been complaining that the cash shortages in Zimbabwe are affecting business.
“The tight liquidity situation required us to adopt a more rigorous credit management policy which we extended to export sales as well,” said Sebborn. “The action was necessary but did affect export performance.”
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