PLASTIC pipe manufacturer, Proplastics Limited (Proplastics) recorded a 10% decline in revenue to US$14,52 million for the nine-month period ended September 30, 2024 due to a drop in sales volumes.
The decline contrasted with the US$16,16 million revenue that the company earned in the comparative 2023 period.
In its trading update for the nine months ended September 30, 2024, Proplastics said the period under review was impacted by economic headwinds, including liquidity constraints and macro/micro economic pressures.
“Sales volumes for the period under review of 4 800 tonnes represents a modest decline of 4% compared to the same period last year.
Revenue totalled USD14,522 million, representing a 10% decrease from the prior year’s revenue of USD16,163 million, aligning with the drop in sales volumes,” Proplastics said.
“Overall, the group experienced a decline in profitability levels for the period compared to the prior period.
“Production volumes declined by 5% compared to the previous period, enabling the fulfilment of backorders and replenishment of fast-moving inventory.”
Proplastics said the period under review saw stable raw material availability, supporting business continuity.
“Government’s prioritisation of road infrastructure rehabilitation projects led to a shift in focus away from water and sanitation initiatives, thereby impacting the group’s potential revenue streams,” Proplastics said.
“Countrywide power outages impacted factory efficiencies despite solar and generator backup.
“The confluence of these issues affected overall group performance.”
The firm is looking for the rainy season to catalyse a surge in project completions, which is expected to benefit its fourth quarter performance.
“The new currency initially achieved exchange rate stability, but its limited availability hindered significant transactions.
“As the new currency increased in the market, exchange rate volatility also increased, making local currency transactions challenging,” Proplastics said.
“The exchange rate volatility prompted a 43% devaluation, to stabilise exchange rates and address market disparities between the official and the alternative rate.
“The impact of this adjustment on businesses is anticipated to unfold in the final quarter of the trading year.”
The company noted that the installation of new equipment in the last quarter will augment certain product ranges, improve product availability, and increase volumes.
“Electricity supply remains a concern for business operations.
“However, the solar project was successfully commissioned during this quarter and will help mitigate the power outages impact,” Proplastics said.
Proplastics said the factory remained capacitated to convert all orders in time.