Despite losing $3.2 million through redundancy costs and a further $3.5 million through exchange losses, Apex Corporation still managed to post an $8.6 million profit in the six months ending April. This was a slight improvement over the same period last year when the group posted a profit of $6.9 million.
The group, which has four divisions: communications, foundries, heavy manufacturing and light manufacturing, had mixed fortunes with communications and light manufacturing making trading profits of $3.8 million and $16.7 million, respectively while foundries and heavy manufacturing made losses of $4.8 million and $11.3 million, respectively.
In the communications division, sales increased to $96.4 million but trading profit was only $3.8 million. The company says this was due to redundancy costs incurred at Supersonic and Bardwells but adds that this regrettable action had to be taken to ensure future viability of both units.
In light manufacturing, although the division made a profit of $16.7 million from sales of $120 million, Precision Grinders, which specialises in grinding mills had a poor six months due to reduced credit availability.
In the Foundries division the company is aiming to reduce its losses by reducing the manufacturing base at Falkirk and supplying the product from Zimcast in Gweru.
Though the heavy manufacturing division made a loss of $11.3 million, the company says, the division had shown good recovery with a steady order book within all the units.
The company says while productivity had improved, the effects were negated by the continued inflation which in turn reduced real economic activity.
Another problem seems to be the high interest rate the company is paying. This increased from $11.9 million to $20.3 million.
The company says borrowing has increased marginally due to the funding of the National Railways of Zimbabwe contract with Morewear. Proceeds for this contract, however, will be received from August this year to February next year.