By Staff Writer
HARARE – Listed tyre retailer and services provider National Tyre Services (NTS) on Wednesday said first half sales volumes declined 32% owing to the effects of Covid-19 pandemic.
Coronavirus has invaded all aspects of Zimbabwean life from communities to companies, which have been forced to scale down operations.
Chief executive Benson Samudzimu told shareholders at the company’s annual general meeting that first quarter sales were weak and they were also affected by Covid-19 in the second quarter due to the lockdown.
In the first half of 2020, new tyre sales declined marginally by 1%. He said this was a ‘remarkable feat’ under the circumstances that they were operating in.
But, the firm has now seen a double digit increase in sales year on year with tube sales in June up 43% from June 2019 levels since the end of the lockdown. NTS is now recording more US dollar sales than that of the local currency which would help in covering their international obligations despite the help of the forex auction.
The firm relies largely on imports from China, Japan and Africa to sustain most of its operations. On a monthly basis it requires about US$1 million for imports.
NTS had a healthy cash to credit ratio which stood at 97% backed by stable margins. There was also improved cash sales and cost containment measures.
The company completed the sprucing up of shops in Bulawayo and Mutare with Chiredzi being the next to be finished. Also, Victoria Falls, Chegutu and Bindura branches are expected to be renovated in the next few months.
“Giving our shops a facelift gives us a hope that the revaluation will give us a competitive edge in the market,” said Samudzimu.
Going forward, the firm is expecting a better second half as it entered into the peak season of tyre sales. This is in the sense that the hot summer season sees most customers changing tires and a good rain forecast means that tractor tyre sales will also increase. In the same vein, the company will stock both premier (Dunlop) and budget tires in stock for those that favour budget tyres owing to cash flow reasons.
Improved stock holding and improved stock supplies are also factors which the company projects a better second half. He said importation of cheap rubber is in order to drive the volumes of the retreading segment.