TYRE and tube retailer, National Tyre Services (NTS) says it is cautiously optimistic of a better business operating environment supported by a promising farming season ahead, a development expected to significantly boost agricultural production.
This comes as the government has unveiled efforts and strategic initiatives towards vision 2030, which are seen driving a spate of developments across a number sectors of the economy, consequently increasing tyre usage.
In a statement accompanying the company’s financial results for the year ended September 30 2024, NTS chairperson Rutenhuro Moyo said the company had hope that the country’s power utility would continue to prioritise availability of power to industry.
Moyo said availability of electricity would minimise factory operating costs.
“The company has resumed direct procurement of budget brands from China to improve product availability, retain market share while enhancing competitiveness,” he said.
“Prospects of better rainfall for the country from the second sub-season until the end of the forecast period, which spans from November-March, bring relief to the economy affected by El Niño-induced drought.
“We are optimistic of strong demand for agriculture tyres as a result. As above, Zimbabwe hopes that the upcoming rainy season will improve water levels at Lake Kariba and enhanced power generation capacity.”
Moyo added that NTS had a huge customer base and was establishing a model of improved competitiveness to offer satisfactory service through stock availability across all our branches.
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During the period, the business recorded a slight decline in new tyre volumes owing to supply chain glitches.
Although volumes were affected, Moyo said light truck tyres grew by 67% as compared to the same period last year due to strong demand as NTS supplied organisations carrying out drought alleviation programmes across the country as well as companies involved in infrastructure development programmes driven by the government.
“Our factories continue to produce highly competitive, quality retreads as well as maintaining good turn-around-time,” Moyo said.
“Retreading factories managed to circumvent power supply limitations through flexible operations. Sales declined by 36% to ZiG37,6 million (2023: ZiG58,8 million). Gross profit increased by 2% to ZiG12 million (2023: ZiG11,9 million).
“Total operating expenses reduced to ZiG19 million (2023: ZiG24 million). The company incurred a loss (before tax) of ZiG36 million from a loss of ZiG35 million in the previous year largely due to foreign exchange movements.”
