Lafarge suffers loss on high tax payment

Lafarge Cement Zimbabwe reported a loss of ZWD1174m (US$4.9m) for 1H18 due to a significant tax settlement.

In 2017, the company disclosed a contingent liability of ZWD7.9m relating to a tax assessment for the 2009-13 period. Last June the matter was heard in the courts but the judgment is yet to be handed down. Income tax payments rose ZWD2.7m from ZWD26,260 during the period under review.
“The company reviewed its risk assessment of the matter and booked a tax provision towards this case. This resulted in the company posting an after tax loss of ZWD1.8m which was flat on prior year performance,” Kumbirai Katsande, Lafarge chairperson, said.

However, the company achieved a sales growth of 41 per cent on the back of an increase in demand for cement, particularly in the out of Harare markets. But to generate foreign exchange, the company also exported 20,000t of clinker at lower margins, resulting in a negative impact on profitability. Therefore, gross profit fell by 14 per cent from ZWD11.9m to ZWD10.3m.