year is struggling to pay off, forcing the group to seek ways to recover the money.
The group disposed of its two non-core businesses and closed two other loss-making divisions, Chemco Transport and Farm-A-Rama, to improve group earnings.
Chemco confirmed in its statement to shareholders for the interim period ended April 30, 2011 that the bulk of the money owed to group was for the disposal of Agpy.
“The bulk of the debt owed to Chemco for the disposal of Agpy Limited in 2010 remains unpaid and proceedings to recover it are underway,” said Chemco.
Disposal of Agpy was aimed at reducing the group’s expensive debt and improving working capital for restocking purposes.
The consortium was led by Mr Brian Mutandiro and Mr Jonathan Shonhiwa. Chemco also indicated that rationalisation of the business activities will continue during the second half of the year and further non-core assets have been identified for disposal.
“This will result in the reduction of expensive debt and improving working capital for restocking.
“Chemco now has a full management to complement the strategic plan and deliver sustainable earnings into the future. A turnaround in group trading results is expected in the last quarter of the year,” added Chemco.
During the first six months of the year, the group turned over US$3,5 million. Loss from discontinued operations was US$184 117 and loss before taxation was at US$661 832.
Amounts owing to the holding company stood at US$935 945.
During the period under review, the remaining branch at Agricultural Buying Services continued to incur losses and was closed at the end of April. The group also said legacy costs from discontinued operations, which were prevalent in the first half of the year, have now been largely mitigated.
Agricura experienced a marginal improvement in sales in the face of competition.
Margins were down compounded by expenditure, which were 11 percent above the prior year and resulted in a small trading profit in Agricor.
TS Timber has commissioned a second sawmill, which will improve timber offtake and management is looking for suitable timber concessions. Chemco is now focusing on the two remaining core operations – Agricura and TS Timbers.
Since dollarisation in 2009, Chemco, like many other companies in the country, has relied on short-term borrowings to sustain its businesses, thereby assuming a huge interest burden.

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