• Fri. Apr 19th, 2024

Proplastics receives qualified audit opinion for FY2023

ByETimes

Mar 27, 2024 #KPMG, #Proplastics

By ETimes

HARARE – Proplastics appears to be in a relatively healthy financial position, with growth in revenue, profitability, and equity, as well as a conservative approach to debt and cash management.
The qualified audit opinion issued by KPMG highlights non-compliance with certain International Accounting Standards in the prior year, which may have impacted the comparability of financial performance. However, the impact of the prior year’s non-compliance on financial reporting should be considered for future assessments of financial health.
The decision not to declare a final dividend to conserve cash shows prudent financial management and a focus on maintaining liquidity.
Key Financial Highlights
– Turnover rose 22% to US$21.3 million in the year ended 31 December 2023 from US$17.4 million in the prior year. It indicates an increase in sales and market demand. Export sales recorded a significant growth of 102%, contributing 11% to total sales, showcasing the company’s expansion into new markets.
– Net profit went up 216.06% to US$519 877 in 2023 from US$164,482 in 2022. The gross profit for the year was US$6.41 million with a gross profit margin of approximately 30%.
– Despite a decrease in gross profit margin, the company showed an improvement in profit before tax and net profit compared to the previous year. This suggests effective cost management and operational efficiency.
– The company’s gearing ratio remained low at 1.5%, indicating a conservative approach to debt financing and lower financial risk.
– Administration expenses declined 10.21% to US$3.91 million from US$4.36 million in the comparative period.
– The company’s total equity increased to US$13,73 million, demonstrating financial strength and stability.
– The total current liabilities amount to US$6.22 million. It is noted that there has been a decrease in current liabilities from US$8.89 million in the previous year to US$6.22 million in the current year. This reduction indicates a positive trend in managing short-term obligations and financial health.

The company’s Property, Plant & Equipment (PPE) and its impact on the going concern status
The restated PPE value stood at US$14.34 million.The company implemented an alternative method to obtain a USD valuation of PPE as of 1 January 2023, resulting in a material difference in the value of PPE compared to the provisions of IAS 21. This led to a prior period error that affected the valuation of PPE, reserves, and deferred tax.The restatement of PPE did not have an impact on retained earnings or earnings-based ratios, indicating that the error did not affect the company’s profitability or financial position.The Board confirmed that the group has adequate resources to continue in business for the foreseeable future, and the consolidated financial results were prepared on the assumption that the group is a going concern. This suggests that the restatement of PPE did not pose a significant threat to the company’s ability to continue its operations.
Proplastics appears to be in a relatively healthy financial position, with growth in revenue, profitability, and equity, as well as a conservative approach to debt and cash management.

By ETimes

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