National Tyre Services (NTS) says it will continue to prioritise cost control and better market outreach initiatives in order to boost the inventory turnover ratio and improve profitability in order to take advantage of the current operating environment.
There has been stability in the market necessitated by a series of measures instituted by authorities to curb inflation.
Most of the businesses are still nursing the wounds incurred during April, May and June when the local unit continued to depreciate in both the formal and informal markets.
This fuelled a spike in prices, which afflicted consumers.
“The monetary measures being implemented by the government to stabilize the local currency are bearing fruit given that the local currency is firming against the US Dollar. Foreign currency exchange rates are stabilising on parallel and auction markets,” NTS chairman Rutenhuro Moyo said in the results for the year ended 31 March 2023.
Moyo said they are cautiously optimistic that currency rates will remain stable going forward, which will help with planning and corporate expansion.
“Industry is expecting that the current stability in power generation will continue to minimise production disruptions. We are projecting increased demand for tyres and related product and services pick-up in the buildup to general elections and the upcoming agricultural season.”
The business focuses on selling and retreading tyres for cars, light trucks, heavy trucks, earthmoving equipment, mining equipment, and industrial vehicles. Most of the company’s operations are supported by imports from China, Japan, and Africa.
As of the financials, NTS inflation adjusted sales revenue rose 21% to $4.33 billion from $3.57 billion due to the continued implementation of the turnaround strategy.
Total operating expenses were maintained at prior levels at $2.17 billion.
The company incurred a loss of $427 million from a profit of $1.18 billion in the previous year.
It did not declare a dividend, citing the need to restore working capital to adequate levels to support the business.
NTS share price yesterday remained unchanged at $21.20.