Locally, the operating environment during the period under review was characterized by liquidity challenges, exchange rate depreciation, pricing distortions in the formal market and depressed demand, with the distribution business being the most affected. Malawi continued to grapple with foreign currency unavailability whilst the Zambian market experienced a fluctuating exchange rate, resulting in loss of value on overall net assets of the business. Regardless of the challenging environment, the Group saw volumes growth in TV Sales & Home (TVSH), Restapedic Manufacturing, Legend Lounge and Transerv. TVSH opened 2 new bedtime stores and has been exploring new product ranges within its network. Consequently, the business recorded an 11% volumes uplift. The Restapedic and Legend Lounge divisions performed well, with 58% and 34% volumes growth, respectively. DGA Zimbabwe experienced suppressed trading as formal traders failed to adhere to the agreed payment terms, which adversely affected the working capital cycle of the business and resulted in a 39% volumes decline. In Malawi, despite foreign currency challenges, DGA volumes recorded a 26% growth. However, volumes growth in Zambia was marginal at 2%, and the depreciation of the Kwacha resulted in a decrease in revenue in real terms. Transerv expanded its footprint, opening 6 new retail branches and 2 fitment centres, stimulating an 8% volumes growth. Overall, the group’s revenue eased 4% to US$97.25mn during the period, from US$100.81mn in 1H23. TVSH contributed 33% of revenue with DGA Zimbabwe following at 27%. EBITDA however increased to US$12.92mn from US$12.35mn on account of improved cost efficiencies and clawing back on margins, with EBITDA margin for the period improving to 13.29% (1H23: 12.25%). The bulk of earnings were from TVSH (58.22%), with DGA Zimbabwe accounting for 16.54%. The Group closed the period with a PAT of US$6.03mn, 7% above the prior period (1H23: US$5.65mn). The business closed the period with cash and cash equivalents of US$12.26mn after generating US$9.74mn in cash from operations, whilst total borrowings closed at US$18.93mn. Axia declared an interim dividend of USc 0.18 per share.
