Lafarge Cement Zimbabwe reports 4% revenue decline in 2017

Lafarge Cement Zimbabwe Ltd posted a loss of US$609,589 for the year ended 31 December 2017. Revenue during the period under review fell 4.14 per cent to US$58.4m from US$61m recorded at the end of 2016. Total current liabilities rose by 9.2 per cent to US$38.18m.

Lafarge Cement Zimbabwe Chairman, Kumbirai Katsande, said a full-year sales decline of four per cent was recorded with reduced volumes, which contributed to the loss. Heavy rainfall adversely affected cement stocking patterns and partially contributed to low sales in the early part of 2017.

"Additional costs incurred to optimise logistics networks, distribution costs increased by six per cent. Administration expenses increased by 26 per cent mainly driven by the SAP [systems, applications and products] project implementation costs and current information system productivity upgrades. Retrenchment costs recorded in the year reflected the partial implementation of plans targeted at managing costs. As a result, the company recorded a profit before interest and tax of US$860,000, down from US$4.47m in 2016," he said.

"The company incurred increased finance costs due to the utilisation of standby financing facilities. Ultimately, the company registered a total loss after taxes of US$610,000 from a profit of US$3.13m in the prior year, a decline of 119 per cent. The total current assets increased by 3.9 per cent, largely due to increases in prepayments, following a decision to hedge price increases on strategic raw materials."

Insufficient foreign currency to import critical equipment and other production inputs led to the increased finance costs.