Lafarge Cement Zimbabwe plans to spend $4,5 million on capital expenditure during 2012 in a move aimed at improving the plant’s efficiencies.
In a trading update for the first three months ending March, managing director Jonathan Shoniwa said: “This is expected to result in better plant rehabilitation and improved efficiencies.”
He said cement demand in the first three months was up 31% and the market remained predominantly retail as the construction sector’s contribution was stagnant at 18%.
In the first quarter revenue was up 32% to $16 million. The company is projecting full-year revenues of $60 million up from $50 million last year.
“Profit margins at 13% are expected to improve further following the reorganisation and anticipated increased efficiencies,” he said.
“We recorded minimal exports for the quarter as the main strategy is to focus on the more profitable domestic market.”
Shoniwa said cash generation was expected to improve in line with improved operating margins and working capital management.
During the year ended December 2011, Lafarge recorded a 19% increase in turnover of $49,7 million.
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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 $2,7 million the previous year.
Last year, 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.
