Rising local demand for cement spurred Lafarge Cement Zimbabwe to a 19% increase in turnover of $49,7 million for the year ended December 2011.
The company remained bullish as it anticipated demand for cement to remain strong. Profit before tax was up 35% to $5 million from $3,7 million recorded in the previous year. The profit before tax margin increased to 10% from 9% in 2010.
Profit for the year amounted to $3,5 million up from $2 682 the previous year.
In a statement accompanying the company’s financial results, Lafarge chairperson Muchadeyi Masunda said total sales volumes of cement rose by 4%.
Export volumes were, however, down 19% as more emphasis was placed on meeting local domestic demand.
“The year ended December 31 was characterised by a liquidity crisis resulting in low cement uptake,” Masunda said.
“However, cement demand for individual home projects increased as people focused on improving and building residential houses.
“I remain bullish about the Zimbabwe economy which is expected to continue growing with increased activity in mining, construction and infrastructure development.
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“Prospects for further growth in domestic demand for cement remain strong.”
The company’s finance costs increased by 64% to $0,7 million as the business increased short-term borrowings to bridge working capital constraints during a major plant shutdown period.
Basic earnings per share improved to $0,04 per share from $0,03.
Masunda said the financial position showed an improved current asset position that would provide necessary working capital for the business going forward.
“Net cash generated from operating activities improved from $3,7 million in 2010 to $5,6 million due to improved management of working capital,” he said.
Masunda said the company had benchmarked its activities against fellow subsidiaries in the group in an endeavour to contain the high operating costs.
“Accordingly, various cost–cutting steps, such as right-sizing the headcount, have already been set in motion, among other measures,” he said.
