Zimplow Holdings Limited HY 2014 financial results presentation

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Zimplow Holdings Limited leading provider of agricultural, mining and infrastructural engineering
solutions through internationally acclaimed dominant brands listed on the Zimbabwe Stock Exchange has released its half year results presentation.Check out insights into this company in their presentation which appears below
Sign up to receive email alerts on company news and daily share price from their company investor relations http://bit.ly/1pcaHs0

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Zimplow Holdings Limited HY 2014 financial results presentation

  1. 1. BRIEFING ANALYST
  2. 2. AGENDA Zondi Kumwenda Chief Executive Officer • Strategic and Operational Overview Zondi Kumwenda • Financial Overview Francis Rwakonda Finance Director Francis Rwakonda • Future Outlook Zondi Kumwenda
  3. 3. STRATEGIC AND OPERATIONAL OVERVIEW Zondi Kumwenda
  4. 4. OUR MISSION To provide agricultural, mining and infrastructural engineering solutions through internationally acclaimed dominant brands.
  5. 5. OUR VALUES We pride ourselves on values based on integrity, teamwork, wisdom and positivity... these are our pillars which will serve as a basis for all our actions. INTEGRITY – Act honestly, responsibly and respectfully towards others at all times TEAMWORK – Trust, support and motivate each other to increase the company’s ability to deliver value to its customers. WISDOM – Work on the ability to discern what is true, right and lasting. POSITIVITY – Envision the future and focus efforts on services, excellence and competitiveness. Create value and optimism and make a difference to both the customers and the employees. SAFETY – We commit to provide a healthy and safe working environment and remind each other to “take care”.
  6. 6. OUR BUSINESS UNITS “ We strive to be our customers’ first choice by establishing long-lasting, fruitful relationships based on trust and mutual respect. ” 1. Significant reduction in the level of borrowings and associated costs by quarter 3. 2. Aim to reduce operating costs in some units and improve efficiencies through the workshops and factories. 3. Improve revenues in the tractor division through asset based finance. 4. Complete the CT Bolts/Tassburg marriage by Quarter
  7. 7. MEALIE BRAND Manufacturer and distributor of agricultural implements PRODUCTS Ploughs, cultivators, planters, harrows, hoes and parts
  8. 8. Manufacturer and distributor of fasteners PRODUCTS • Mild Steel Bolts and Nuts • Mild Steel Hex Sets • Mild Steel Studding • High Tensile Bolts and Nuts • Aluminium Blind Riverts • Screws • Washer Products • Nails and Nail Products
  9. 9. Distributor of mechanised farming equipment PRODUCTS • Tractors: Massey Ferguson, Valtra, Challenger • Generators: Perkins, Massey Ferguson • Combine Harvesters: Massey Ferguson • Implements and Planters: Massey Ferguson, Monosem, Falcon
  10. 10. Distributor of farming equipment. • PRODUCTS • CASE tractors and implements • CASE Combine Harvesters • Baldan implements • TCM Forklifts
  11. 11. Earthmoving and mining equipment PRODUCTS • Trucks • Compactors • Draglines • Hyster Forklifts • Wheel Dozers • Wheel Loaders • Scrappers • CAT Generator sets
  12. 12. OPERATIONS
  13. 13. FARMING – ANIMAL DRAWN BUSINESS 16,000 14,000 12,000 10,000 Title 8,000 Axis 6,000 4,000 2,000 - Local implements Export implements Local hoes Export hoes Animal drawn business volumes 15% up 59% down 6% down 24% down Key June 2014 June 2013
  14. 14. FARMING – ANIMAL DRAWN BUSINESS 120,000 100,000 80,000 60,000 40,000 20,000 - Local Spares Export Spares Units Spares volumes - Animal drawn business 137% up 5% up Key June 2014 June 2013
  15. 15. FARMING – ANIMAL DRAWN BUSINESS Volumes were affected by the following: • Low disposable income, with customers opting to purchase spares rather than new implements. • Price competition from the East. • Donor fatigue
  16. 16. FARMING – MECHANICAL AND TRACTOR BUSINESS 60 50 40 30 20 10 0 Tractors Combines Gensets Motorbikes Implements Axis Title Unit volumes - Tractor business No change Down 22% Up 283% Up 900% Down 5%
  17. 17. FARMING – MECHANICAL AND TRACTOR BUSINESS 35,000 30,000 25,000 20,000 Title Axis 15,000 10,000 5,000 - June 2014 June 2013 Service hours - Tractor business Down 50%
  18. 18. FARMING – MECHANICAL AND TRACTOR BUSINESS Volumes and turnover were affected by the following: • To reduce credit risk, the business units operated on a near-cash model during the first six months of the year. • Delayed off-take of the secured financing facilities. Volumes are expected to improve in the second half of the year, as these are now in place.
  19. 19. MINING AND INFRASTRUCTURE BUSINESS 16 14 12 10 8 6 4 2 0 Earthmoving Liftrucks Gensets Units Barzem unit sales 78% down 58% down 60 % down Key June 2014 June 2013
  20. 20. MINING AND INFRASTRUCTURE BUSINESS 18,000 16,000 14,000 12,000 10,000 Title Axis 8,000 6,000 4,000 2,000 - June 2014 June 2013 Barzem service hours 60% down
  21. 21. MINING AND INFRASTRUCTURE BUSINESS Volumes and turnover were affected by: • Delays in target projects that were imminent. • Decline in the traditional exported labour which has also negatively impacted service hours. • Low activity on road construction, mining and infrastructure development in the country.
  22. 22. FASTENERS BUSINESS 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 - Mild Steel Units High Tensile (Bolts) Units Screws (Units) Miscellaneous Factory Stock Units Fasteners Business Volumes 15 % down 34 % down 42 % down 19 % down 26 % down Key June 2014 June 2013
  23. 23. FASTENERS BUSINESS 70,000 60,000 50,000 40,000 30,000 20,000 10,000 - June 2014 June 2013 Kilograms Fasteners Business Volumes 33 % up 42 % up Key June 2014 June 2013
  24. 24. FASTENERS BUSINESS (CONTINUED) The fastener business continues to be affected by: • Closures of formal businesses that were high fastener consumers. • Low infrastructural activity within the market. • Competition from the east . • Arbitrage opportunities for small traders with very low overheads.
  25. 25. FINANCIAL OVERVIEW Francis Rwakonda
  26. 26. STATEMENT OF COMPREHENSIVE INCOME GROUP 30 June 2014 30 June 2013 Revenue 13 336 445 20 064 255 Operating profit/(loss) (1 649 047) 762 388 Restructuring expenses (45 616) (295 024) Gain on disposal of subsidiaries - 1 813 999 Exchange loss - - Share of loss from joint venture (29 770) (79 118) Net finance costs (359 253) (34 854) Profit/(Loss) before tax from continuing operations (2 083 686) 2 167 391 Income tax credit/ (expense) 350 133 (215 852) Profit/(Loss) after tax from continuing operations (1 733 553 ) 1 951 539 Loss from discontinued operations - (489 378) Profit/(Loss) for the year (1 733 553) 1 462 161 Non controlling interests (273 206) 285 520 Attributable (Loss)/profit (1 460 347) 1 176 642
  27. 27. OPERATING SEGMENT REVIEW Farming Mining and Infrastructure Property Adjustments* Total Revenue 8,487,170 4,685,809 165,807 24,518 13,363,304 Intersegment revenue (26,859) - - - (26,859) TOTAL REVENUE 8,460,311 4,685,809 165,807 24,518 13,336,445 SEGMENT OPERATING (LOSS) / PROFIT (230,736) (726,977) 158,425 (849,759) (1,649,047) Unallocated items: Restructuring expenses (45,616) Share of loss of Northmec JV (29,770) Net finance costs (359,253) GROUP LOSS BEFORE TAX (2,083,686) Income taxes 350,133 GROUP LOSS AFTER TAX (1,733,553) SEGMENT ASSETS 25,837,118 10,959,949 6,008,939 6,508,914 49,314,920 SEGMENT LIABILITIES 7,482,713 1,665,375 1,066,209 9,907,822 20,122,119 * Adjustments for intersegment transactions and the Corporate office
  28. 28. GROUP RESULTS • Group revenue down 34% from US $ 20 million to $ US 13.3 million • Group operating profit down from $ US 762 388 to a loss of $ US 1 649 047 • Group profit after tax from continuing operations down $ US 1 951 539 to a loss of $ US 1 733 553 • Agriculture businesses have increased activity in the second half of the year in line with the farming season and are likely to recover. • The Group is likely to recover in the second half.
  29. 29. STATEMENT OF FINANCIAL POSITION ASSETS • Total assets down by 1.5% • US $ 222 850 spent on capital expenditure BORROWINGS • US $ 586 002 net borrowings repaid from December 2013. STRATEGY ON BORROWINGS • Buyer for $ US 3.5 million asset held for sale now secured and transaction to be complete by the third quarter. Proceeds to be used to reduce borrowings level.
  30. 30. STATEMENT OF FINANCIAL POSITION ASSETS GROUP 30 June 2014 31 Dec 2013 Property, plant and equipment 13 229 607 13 469 288 Other non current assets 5 603 229 5 950 658 Current assets 26 982 084 27 151 205 Assets held for sale 3 500 00 3 500 000 TOTAL ASSETS 49 314 920 50 071 151 EQUITY AND LIABILITIES Share capital and reserves 25 962 289 27 429 365 Non Controlling interest 3 230 512 3 508 276 Total equity 29 192 801 30 937 641 Long term interest bearing liabilities 1 379 543 1 116 485 Deferred tax 2 883 378 3 121 494 Current liabilities 15 859 198 14 895 531 TOTAL EQUITY AND LIABILITIES 49 314 920 50 071 151
  31. 31. STATEMENT OF CASHFLOWS GROUP 30 June 2014 30 June 2013 Cash outflow from operations (847 630) (351 329) Tax paid (202 068) (674 603) Net finance costs paid (359 253) (34 854) NET CASH OUTFLOW FROM OPERATING ACTIVITIES (1 408 951) (1 060 786) Acquisition of property, plant and equipment (222 850) (275 776) Proceeds from disposal of PPE 34 572 29 252 Net cash inflow from disposal of subsidiaries 74 249 100 000 CASH USED IN INVESTING ACTIVITIES (114 029) (146 524) Increase in Borrowings - 4 131 117 Repayment of Borrowings (586 002) - Acquisition of NCI - (3 374 495) NET CASH (OUTFLOW) / INFLOW FROM FINANCING ACTIVITIES (586 002) 756 622 Decrease in cash and cash equivalents (2 108 982) (450 688) Effects of exchange rate changes on the balance of cash held in foreign operations (23 755) (84 321) Cash and cash equivalents at the beginning of the year 98 260 2 293 182 CASH AND CASH EQUIVALENT AT THE END OF THE YEAR (net of overdrafts) (2 034 477) 1 758 173
  32. 32. FUTURE OUTLOOK Zondi Kumwenda
  33. 33. FUTURE OUTLOOK • Agricultural units expected to be stable and will recover from the first half losses. August volumes have been encouraging. • The fastener business will post a loss which will be lower than the first half loss • Mining and infrastructure business will somewhat recover to post a breakeven or loss position as most capital projects have been pushed into 2015.
  34. 34. QUESTIONS?

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