A recovering construction sector and strong consumer demand is set to buoy cement manufacturing firm Lafarge to achieve its full-year revenue target of $50 million.
In 2010 the company achieved $41,7 million. Gross revenue for the first six months ended June 30 grew 27% from $17,2 million from $21,9 million.
Export clinker volumes were depressed, declining by 7,2% compared to 2010 due to production constraints that resulted from the planned kiln shutdown and priority being given to the local market.
In a trading update, Lafarge managing director Johnathan Shoniwa said national domestic cement demand for the first eight months was 51% up from last year.
“In the past, market was predominantly retail, but there was a marked improvement in the construction sector, which now contributes 18% of sales compared to 6% last year,” said Shoniwa.
“Export volumes for the eight months were 21% below last year due to fuel and foreign currency shortages in Malawi, our main export market.”
He said the company hopes to achieve an operating profit for the year of $5 million adding that cash generation would improve in line with enhanced operating margins.
During the period under review margins declined from 9,4% in 2010 to 0,3% attributed to costs associated with a major plant shutdown.
“A loss attributable to shareholders of $0,4 million was incurred compared to $1,5 million profit for the same period last year. Consequently a loss per share of 0,5 cents was incurred compared to an earnings per share of 1,9 cents in 2010,”
Lafarge chairman Muchadeyi Masunda said in a statement accompanying the company’s over six months financial results.