PG profit up 552 percent

Despite the shortages of electricity, cement, coal, fuel and other utilities which have become a daily challenge, PG Industries says it has so far been able to read the Zimbabwe economy accurately. And the figures show.

The company saw its sales soar from $6.2 billion to $23.8 billion during the year ended March. Local sales increased from $4.7 billion to $17.1 billion while exports shot up from $1.5 billion to $6.7 billion.

Exports now represent 28 percent of revenue, up from 24.5 percent last year. Net profit increased more than six-fold from $704 million to $4.6 billion.

Operating margins improved significantly from 16 percent to 26 percent and the company had net cash of $1.9 billion at the end of the year, despite significant investment in stock, export growth and capital expenditure.

During the year, the group converted its operating divisions into stand-alone subsidiaries: Zimboard Products, PG Merchandising and Plate Glass.

It says the primary objective was to allow each business to seek partnerships and business linkages appropriate to its objectives. The trading division contributed the bulk of the turnover with $14.1 billion.

Its operating profit increased by 497 percent from $475 million to $2.8 billion. Margins improved from 12 percent to 20 percent.

Sales for the glass division increased by 331 percent to $5.4 billion while operating profit increased by 670 percent to $2.1 billion. Margins improved from 22 percent to 39 percent.

The Safety Glass Factory increased margins by 10 percent while exports increased by 13 percent. It says it will increase the capacity at the safety glass plant by 50 percent to meet increased demand.

The company, however, says it faced stiff competition in the flat glass and glazing business from increased imports of cheap and “inferior quality” glass mainly from China.

Sales in board manufacturing increased by 282 percent to $4.3 billion with margins improving from 21 percent to 27 percent.

The company says though the economic situation in Zimbabwe is not expected to improve, the available capacity at Zimboard and PG Safety Glass presents opportunities to increase exports.

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