PG Industries: Net profit increased

It says although the economic and socio-political environment continues to deteriorate, presenting continuous strategic and operational challenges to the business sector, opportunities prevail in the construction sector for astute operators.

It increased its net profit from $8.8 million in the first half of last year to $397 million, more than treble the net profit of $109.4 million it realised for the 2001 financial year which ended in March. Its results were impressive even under inflatiion accounting.

Its net profit increased from $111.5 million to $577.5 million. Sales more than doubled from $1.1 billion to $2.5 billion, more than the $2.2 billion realised for the entire 2001 financial year.It says there was a remarkable turnaround at Zimboard with turnover increasing by 104 percent to $433.6 million.

Operating profit stood at $135.7 million compared to a loss of $22.9 million the previous year. It says although the cost of inputs such as power and consumables increased significantly, the board manufacturing division realised growth both in domestic and export sales. Operating margins improved from a negative 11 percent to 31 percent.

The glass division also did well with sales increasing by 142 percent to $508.3 million and operating profit by 114 percent to $168.8 million. Raw glass imports from South Africa were, however, significantly affected by the non-availability of export credit insurance cover. Margins were therefore squeezed because of the high cost of currency to meet import requirements.

Sales in the trading division more than doubled to $1.5 billion. Operating income was up 191 percent to $212.9 million. Margins improved by 40 percent. The company says although it is difficult to make any meaningful forecast because of the prevailing uncertainties in the country, it has put in place various strategies that will enable it to take advantage of business opportunities that arise.

It says it has set up a technical and investment committee to help management in re-engineering the company's operations. This strategy, it says had already borne fruit in the turnaround at Zimboard.