Group Chief Executive Officer of Zimplow Holdings Limited Charles Chaibva. Photo: Tinashe Floyd Bizeki/Equity Axis

  • Zimplow swings to US$891,063 pre-tax profit, with 71% generated in the third quarter
  • Mealie Brand’s export volumes overtake domestic sales despite declining combined implement volumes
  • Agriculture-exposed divisions generate 54% of revenue ahead of anticipated El Niño conditions

Harare – VFEX-listed Zimplow Holdings has recorded a US$1.54 million turnaround in pre-tax earnings for the nine months ended September 2026, supported by stronger margins, improved stock availability and a shift towards export markets and mining customers.

The recovery comes ahead of a potentially difficult agricultural season, with the group’s Mealie Brand division now exporting more implements than it sells domestically, reflecting an increasingly important adjustment to Zimbabwe’s cyclical farming equipment market.

Zimplow reported profit before tax of US$891,063, recovering from a US$650,998 loss in the comparable period of 2025. Revenue increased by 10.6% to US$24.88 million, while gross margin improved by 1.9 percentage points to 28.2%. The improvement lifted estimated gross profit from US$5.91 million to US$7.02 million, representing growth of approximately 18.6%, considerably ahead of revenue expansion.

The stronger margins suggest that changes to Zimplow’s operating model and cost structure are beginning to improve earnings generation. However, the group’s pre-tax margin remains relatively modest at 3.6%, leaving profitability sensitive to changes in sales volumes, operating costs and demand across its principal business units.

The recovery gained momentum during the third quarter, which contributed US$634,775 in pre-tax earnings, equivalent to 71.2% of the nine-month total. This exceeded the US$256,288 generated during the first six months combined, indicating stronger profitability as the year progressed. Management attributed the improvement to increased economic activity and better stock availability, supported by adjustments implemented since 2025.

The most pronounced structural change emerged within Mealie Brand, where export implement volumes increased by 46.4% to 9,461 units, overtaking domestic sales of 7,150 units, which declined by 33.9%. Exports consequently represented approximately 57% of combined implement volumes, against an estimated 37% in the comparable period last year. This reflects a significant reorientation of the division’s sales towards external markets.

However, the combined volume of implements sold locally and internationally declined by approximately 3.9%. The export expansion therefore cushioned the contraction in domestic demand without fully replacing the lost unit sales. Mealie Brand’s revenue nevertheless increased by 16.1% to US$3.43 million, supported by a broader product and customer mix.

Export revenue rose by 42.8% to US$1.15 million, although domestic revenue remained higher at US$1.81 million despite declining by 15.4%. The difference shows that export-volume leadership has not translated into revenue leadership. Revenue classifications include different product categories and parts sales, meaning average revenue per implement cannot be reliably established from the disclosed figures.

Diversification into mining contributed an additional US$459,843, representing 13.4% of Mealie Brand’s revenue from a market it had not served in the comparable period. These developments helped the division reverse a US$43,347 pre-tax loss into a US$96,321 profit. Its margin of approximately 2.8% remains thin, indicating that further improvements in sales mix, production efficiency and operating costs will be necessary to establish a stronger earnings buffer.

The wider group remains materially exposed to agricultural spending. Farmec and Mealie Brand generated combined revenue of US$13.54 million, equivalent to 54.4% of group turnover. This does not represent exclusively domestic agricultural revenue, given Mealie Brand’s growing export and mining businesses, but it demonstrates the continued importance of agriculture-linked equipment operations to Zimplow’s commercial performance.

Farmec remained the group’s largest individual revenue contributor, with turnover increasing by 25.7% to US$10.11 million and pre-tax profit rising by 151.9% to US$565,297. Tractor sales increased by 14% to 122 units, while implement sales advanced by 23.8% to 369 units. Parts revenue grew by 24.6% to US$1.73 million, reflecting continued demand for equipment maintenance and replacement components.

However, workshop hours increased by 20% to 9,218 while service revenue declined by 1.6% to US$653,237. The divergence indicates that greater workshop activity did not translate into additional service revenue, raising questions about billing rates, utilisation mix and revenue realisation. Improvements in this relationship could strengthen returns from existing infrastructure without requiring equivalent growth in equipment sales.

Zimplow’s diversification strategy is also gaining traction outside agriculture. Scanlink increased pre-tax profit by 212% to US$402,218 despite revenue declining by 1.1% to US$5.31 million. Parts revenue increased by 30.7% to US$2.47 million, while service revenue grew by 15.3% to US$1.04 million. These higher-margin aftermarket activities supported a 7.2 percentage point improvement in gross margin to 27.9%.

Mining demand provided additional support through Trentyre, where revenue grew by 29.8% to US$2.18 million. New tyre sales increased by 66.7%, supported by mining-sector orders, helping reduce the division’s pre-tax loss by 95.7% to US$12,027. Meanwhile, Powermec returned to profitability, with solar and accessories revenue more than doubling to US$604,852, representing 22% of divisional turnover.

These developments broaden Zimplow’s earnings base across sectors with different demand drivers. Mining equipment, aftermarket services and solar products provide additional revenue opportunities when agricultural investment weakens. However, they introduce their own exposure to commodity investment cycles, customer capital expenditure and imported equipment costs.

The importance of this diversification is reinforced by Zimbabwe’s projected 2026/27 rainfall outlook. The Meteorological Services Department and regional climate authorities anticipate below-normal rainfall under developing El Niño conditions, while Treasury expects agricultural growth to slow to 1.5% in 2027. Reduced harvests could weaken farmers’ purchasing power and defer purchases of tractors, implements and related equipment.

The group’s experience during the 2024 drought illustrates the transmission risk. In the first quarter of that year, Mealie Brand’s domestic implement volumes declined by 47%, while Farmec tractor sales fell by 53%. A renewed agricultural downturn could therefore test Zimplow’s ability to preserve equipment sales and earnings, although the extent of any impact will depend on actual rainfall, farm incomes and the availability of agricultural financing.

Management is responding through regional export expansion, mining-sector diversification, tighter cost controls and working capital preservation. Zimplow has also disclosed advanced negotiations to acquire a business in a related industry, although the acquisition target, purchase consideration and financing arrangements remain undisclosed. The transaction’s contribution to earnings and capital requirements cannot yet be assessed.

Zimplow enters the next agricultural cycle with a stronger operating position, improved margins and more diversified revenue sources. However, the group’s relatively thin pre-tax margin and continued agriculture-linked exposure mean the durability of the recovery remains untested under the anticipated weather conditions. The critical measures over the coming quarters will be sustained export growth, stronger divisional profitability, improved service revenue conversion and the ability of non-agricultural operations to absorb weakness in domestic equipment demand.

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