WILLDALE Limited sees a brighter second half of its financial year buoyed by reduced downtime and the restructuring of the interest bearing debt.
BUSINESS REPORTER
The brick-maker narrowed its loss for the half year ended March 31 2014 to $606 400 from $613 600 in the same period last year.
Turnover grew by 9% to $3,3 million driven by a 24% increase in volumes.
In a statement accompanying the group’s financial results, Willdale chairperson Alex Jongwe said cost-reduction initiatives, including plant rehabilitation and improved maintenance systems would result in improved profitability for the second half of the financial year.
“Although the first half of the year was characterised by high down-time caused by shortages of working capital, breakdowns in fixed and mobile plant, inadequate mobile equipment, rains and ZESA power outages, the bulk of the funding raised has been invested to reduce the downtime,” Jongwe said.
“This will result in an increased in production and reduced cost of production.”
Net financing costs decreased marginally by 1% to $227 799 from $230 968 in 2013.
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“Interest-bearing debt has been restructured and this will result in a reduction in financing charges in the second half of the year. In the prior year, the directors carried out a revaluation of property, plant and equipment which resulted in pre-tax increase in comprehensive income of $10,97 million,” Jongwe said.
He said the management “continues to review processes in the value-chain benchmarking with regional manufacturers with the aim of improving plant efficiencies and reducing costs.”
In the period under review, the company recorded a 4% gross margins, but this could not absorb all overheard costs resulting in an operating loss amounting to $494 300 from $518 900 in 2013 after charging $318 800 from $239 900 in depreciation of property, plant and equipment.
Jongwe, however, said the funding obtained from the rights issue has enabled an early ramping up of production with the monthly production targets now being achieved.
This, together with cost-savings across the production line would result in improved performance in the second half of the financial year, he said.
Willdale recently raised $3,2 million through a rights issue.
Jongwe said turnover would be driven by major construction projects already on the order book and several other potential ones the company was pursuing.
