Business / Companies
Aged equipment blamed for Zimpapers interim loss
30 Sep 2011 at 07:10hrs | Views
Zimpapers posted a lukewarm set of interim results showing a attributable loss of $1.4 million from a profit of $0.9 million the prior period. The poor performance can be attributed to high maintenance costs on aged equipment, low capacity utilization and importation of newsprint.
GP margins declined to 63.8% from 67.7%. The Newspaper Division reported a PBIT of $0.7 million while the Commercial Printing unit posted a loss of $0.8 million an improvement from a prior year loss of $1.6 million.
Cashflows were strained and the group faces liquidity constraints with a current ratio of 0.6x. Net gearing deteriorated to 30.2% from 15.3% at 31 December 2010. The group's fortunes hinges on the recapitalization plan.
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. Traditionally the second half is the busier period and management expect the business to return to profitability in the current year.
GP margins declined to 63.8% from 67.7%. The Newspaper Division reported a PBIT of $0.7 million while the Commercial Printing unit posted a loss of $0.8 million an improvement from a prior year loss of $1.6 million.
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. Traditionally the second half is the busier period and management expect the business to return to profitability in the current year.
Source - Imara Stockbrokers
