• Sales volumes declined 1%, with turnover falling 4% to US$7 million in Q1 FY2026
• Export volumes dropped 2% after tighter regional credit controls, while the paper division was deliberately scaled down to protect margins and liquidity
• Energy segment margins improved, but production disruptions and cost pressures — particularly at Mutare Estates despite a 40% volume surge

Harare - The Zimbabwe Stock Exchange (ZSE)-listed diversified outfit, Amalgamated Regional Trading (ART) Holdings, has opened its 2026 financial year under pressure, with overall sales volumes easing 1% in the first quarter ended 31 December 2025, reflecting constrained demand conversion amid persistent working capital limitations .

The marginal volume decline fed into a 4% drop in turnover to US$7 million as the group prioritised margin defence and cash preservation over aggressive volume expansion .

While the trading environment was characterised by continued monetary stability, high borrowing costs and tight liquidity conditions limited operational flexibility , export volumes were down 2% as ART selectively tightened credit terms across the region, signalling a deliberate shift toward balance sheet protection .

''The Group continued to execute strategic intervention measures outlined in the 2025 full year results which include active engagement of creditors, settlement of restructuring obligations, cost control and tight management of working capital,''  company chief executive officer Milton Macheka said.

Within the Energy segment, battery volumes were marginally ahead of prior year levels in the domestic market, supported by improved sales channels and marketing execution . Gross margins strengthened on favourable product mix and cost containment, while the Exide brand continues repositioning efforts aimed at eliminating recurring product shortages .

However, cumulative working capital-induced production disruptions and logistical delays constrained the group’s ability to fully capitalise on demand .

The Stationery and Paper division experienced sharper weakness. Pen volumes declined 14%, with turnover down 12%, partly reflecting improved pricing discipline and stocking patterns among traditional channel partners .

Significant back-to-school orders were only fulfilled in January 2026, deferring revenue into the second quarter. Tissue converting was postponed to preserve working capital and allow better raw material planning .

On the upside , Mutare Estates recorded a 40% surge in timber volumes after broadening its customer base .However higher harvesting and milling costs compressed margins, highlighting the cost pressures facing resource-linked operations.

ART continues executing restructuring interventions including creditor engagement, settlement of obligations, cost containment and tighter working capital management .

Property disposals are underway, with proceeds expected in the second quarter at market-reflective prices .

The company is operating in a more stable macroeconomic setting, but capital scarcity remains the defining constraint. Its near-term trajectory will depend less on demand recovery and more on recapitalisation, liquidity optimisation and disciplined execution.

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