LAFARGE Cement Zimbabwe Limited projects profitability in 2016 after recording a $1,9 million loss in after tax profit for the year-ended December 31, 2015. BY BUSINESS REPORTER
The company recorded a profit after tax of $80 950 in 2014.
In a statement accompanying the company’s results, Lafarge said the economy experienced serious difficulties on a sustained basis because of a combination of factors such as the liquidity crunch, reduced consumer spending due to continued job losses and a poor agricultural season arising from a late and erratic rainfall season.
“We expect the general trading environment to exert sustained pressure on prices due to the ongoing economic stress. However, we anticipate improved profitability in 2016 mainly driven by operational cost reduction measures and targeted strategic marketing initiatives,” the company said.
“The company performed comparatively well despite the economic hardships. Cement sales volumes grew by 5% above the prior year, driven largely by the successful implementation of market growth strategies of leveraging targeting distribution which was supported by the overall domestic market stabilisation.”
The group said sales volumes increased to $61,55 million from $60,45 million representing a 2% growth due to sales volumes, but countered by sub-optimal portfolio and price mix.
Earnings Before Interest and Tax decreased by 230% to a loss of $1,68 million during the period under review from a profit of $1,29 million in 2014 driven to a large extent by these provisions.
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Total assets decreased by 13% to $65 million in 2015 from $69,9 million in 2014 due to the reduction in inventory from the obsolescence provisions.
“Total equity reduced marginally by 5% due to the reduction in retained earnings driven by the loss for the year. Total current liabilities decreased marginally by 4% to $23,36 million mainly due to repayment of borrowings. The net impact of these movements decreased in net working capital of $2,86 million from the prior year,” the group said.
