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NTS revenues increase 17 percent
17/12/2012 00:00:00
by Roman Moyo
 
Revenue increase ... National Tyre Services
 
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NATIONAL Tyre Services (NTS) says its revenue increased by 17 percent to US$8, 4 million for the year ending September 2012 from US$7, 2 million during the same period last year.

The Zimbabwe Stock Exchange-listed company attributes the rise to more efficient stock management and segment-based marketing efforts.

Despite stiff competition in the market, margins improved slightly as a result of a greater revenue contribution from value-addition services.

The combined efforts of the growth in revenue and margins and cost-management initiatives resulted in a 50 percent increase in operating profit in relation to prior year.

The anticipated rise in rubber and oil prices, coupled with unreliable and costly energy supplies had a negative impact on prices and margins in 2012, officials said.

They added that management would work on the introduction of new products and services to cater for identified customer needs, while the distribution network was set to expand through the introduction of service centres in strategic and high-traffic volume areas.

The company said an expanded distribution footprint, additional service and the strength of its brands were other contributory elements for the revenue increase.

Operating profit during the same period rose to US$462 420 from US$308 620.

The tyre manufacturing company said it would continue with the volume growth business model, backed by differentiated services aiming at taking advantage of the anticipated upward movement in the national vehicle fleet.

NTS also believed the growth in distribution and transportation sectors offered opportunity for the group to grow revenues and improve market position.

“The revenue growth was accompanied by a growth in new tyre volumes although retreated units were flats relative to prior year as a result of the tight liquidity conditions,” said NTS in a statement accompanying the group’s financial results.

“The opening of the Chiredzi Branch as Bulawayo Retreating factory in December 2011 and February 2012, respectively, has made significant contributions to revenue and market share growth.”

Going forward, NTS said, the continued growth of the national fleet and economic environment will be catalysts for further stakeholder value creation.

The company will continue to leverage on the distribution network, differentiated service and its brands while continuing focus on mitigation of financial risk.



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