Lafarge Zimbabwe revenue declines 11%

Lafarge Cement Zimbabwe recorded a 11 per cent decline in turnover to US$60.4m for the year ended 31 December due to a drop in volumes and prices.

In the period under review the group recorded a seven per cent drop in domestic sales and a three per cent decline in average selling prices. Profit for the year declined to US$80,950 from US$3.5m in 2013.

“The reason of the decline of the operating profit was coming from a result of lower sales volumes as well as expenditures in investment that we have made in our plant and industry at large. The company invested last year US$7m of capital expenditure out of which US$5m were a loan invested towards our plant. We also spend some $2 million on plant rehabilitation and maintenance,” Amal Tantawi, CEO of Lafarge told NewsDay.

“The company incurred very high maintenance cost in the first half of the year. We had the major maintenance works undertaken to improve the current performance. The total maintenance cost of the year , last year amount to around US$10m and that was some US$2m higher than 2015 as compared to last year.”

Tantawi said despite the high maintenance cost that depressed half year results, the company returned to profitability during the second half of the year.

Tantawi added that although the trading conditions were expected to remain difficult in 2015, the group continues to be optimistic about the Zimbabwean economy that some growth will be recorded from the anticipated increased activity in mining, construction and infrastructure development.

Tantawi said the prospects for further growth in the medium term for domestic cement demand remain strong and the company was well positioned to capture that growth.