Business / Companies
Zimpapers reports a $2.4 million loss
02 Apr 2012 at 07:28hrs | Views
Zimpapers reported a depressed set of results showing an attributable loss of $2.3 million. The poor performance was attributed to high maintenance costs on aged equipment, low capacity utilization and importation of newsprint.
Gross profit margins declined to 64.2% from 66.7%. The Newspaper Division reported a loss of U$0.8m while the Commercial Printing unit posted a loss of $1.4m.
Cashflows were strained and the group faces liquidity constraints with a current ratio of 0.5x. Debtors increased by 30% due to the liquidity challenges negatively impacting cashflows. Net gearing deteriorated to 55.2% from 15.3%.
Zimpapers is a government controlled printing and publishing group encompassing newspapers, commercial printing, directory origination and publishing. Its flagship papers include The Herald, Sunday Mail, Chronicle, Sunday News, Manica Post, H-Metro, B-Metro
Although competition has increased the group remains dominant especially in the classifieds section. Advertising contributes approximately 60% to turnover. The planned upgrade of machinery should result in improved efficiencies. Nonetheless, the group's fortunes hinges on the recapitalization plan.
The company plans to dispose some of its non-productive assets which might prove to be difficult given the liquidity constraints.
Pan-African financial services company, Imara Stockbrokers, said it see limited visibility in the short term to medium term and advised sharehoilders to sell the stock.
Gross profit margins declined to 64.2% from 66.7%. The Newspaper Division reported a loss of U$0.8m while the Commercial Printing unit posted a loss of $1.4m.
Cashflows were strained and the group faces liquidity constraints with a current ratio of 0.5x. Debtors increased by 30% due to the liquidity challenges negatively impacting cashflows. Net gearing deteriorated to 55.2% from 15.3%.
Zimpapers is a government controlled printing and publishing group encompassing newspapers, commercial printing, directory origination and publishing. Its flagship papers include The Herald, Sunday Mail, Chronicle, Sunday News, Manica Post, H-Metro, B-Metro
Although competition has increased the group remains dominant especially in the classifieds section. Advertising contributes approximately 60% to turnover. The planned upgrade of machinery should result in improved efficiencies. Nonetheless, the group's fortunes hinges on the recapitalization plan.
The company plans to dispose some of its non-productive assets which might prove to be difficult given the liquidity constraints.
Pan-African financial services company, Imara Stockbrokers, said it see limited visibility in the short term to medium term and advised sharehoilders to sell the stock.
Source - Byo24News
