RETAIL and distribution company, Axia Corporation Limited, reported a 12% decline in profit after tax to US$5,29 million for its half-year financial period ended December 31, 2024, owing to losses incurred after a sharp devaluation of the Zimbabwe Gold (ZiG) currency.
In the 2023 comparative period, Axia recorded a profit after tax of US$6,02 million.
The ZiG was in September last year devalued by 44% which saw Axia suffering huge losses.
“However, profit after tax declined by 12% to US$5,29 million, primarily due to financial losses on devaluation of the Zimbabwe local currency, which resulted in financial losses amounting to US$2,28 million being incurred,” board chairperson Luke Ngwerume said in a statement accompanying the half-year financial results for the period ended December 31, 2024.
Axia’s main operating business units are TV Sales & Home, Distribution Group Africa (DGA) and Transerv.
“The group reported revenue of US$99,672 million for the period, reflecting a 2% increase compared to the prior period,” Ngwerume said.
“Gross margin improved by 5%, driven by better cost management. Operating expenditure declined by 1% as the benefits of prior-year cost rationalisation initiatives began to materialise, although significant cost pressures persist.”
Axia achieved an operating profit of US$14,69 million, representing a 14% increase compared to the prior period, supported by higher margins, reduced variable costs and overhead savings.
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During the period under review, TV Sales & Home saw strong trading results, with volumes increasing by 6% to 82 039 units from 77 252, driving turnover growth by 6%.
Under its TV Sales & Home Manufacturing segment, Axia reported that Restapedic grew its volumes by 21% to 25 715 units, while revenue grew by 14% over the previous comparable period.
Ngwerume said that for DGA, revenue for the half year declined by 25%, while sales volumes also declined by 28%.
“As previously disclosed in the FY24 year-end financial commentary, the group restructured its operations with one of the major suppliers by forming a joint venture,” he said.
“Revenues from continuing operations increased by 38%. The business is now poised for better profitability as a result of the restructuring.”
Transerv recorded a 27% increase in revenue on the back of a 4% increase in volumes during the first half of the year compared to the same period last year.
The growth was primarily attributed to an increase in solar product sales, and the new branches opened.
“The company has successfully executed most of its expansion plans and now operates through 54 retail outlets and 10 fitment centres,” Ngwerume said.
Axia is working on exploiting e-commerce opportunities and expanding its product offerings.
The group had US$1,64 for every dollar of short-term debt, leaving it in a liquid position to carry out any capital expenditure requirements.
“Focus will be made on improving productivity in the manufacturing business and aligning product offerings to various market demands,” Ngwerume said.
Total assets grew to US$128,21 million during the period under review, from US$127,55 million recorded as of June 30, 2024.
This was owing to an increase of US$7,35 million in money owed to the firm by its clients.
