Lafarge emerges from loss position to post US$1,3m profit

By The Standard | May. 3, 2019 | 2 Min read

Lafarge Cement Zimbabwe Limited reversed its prior year-after-tax loss of US$0,6 million to a profit margin of US$1,3 million in the year-ended December 31, 2018, driven by growth in revenue and an expansion of its distribution footprint into regional markets.

BY MISHMA CHAKANYUKA

Revenue was up 24% to US$72,3 million due to better average selling prices achieved following price adjustments in the last quarter of the year, as well as a favourable product mix twisted in favour of higher strength cements.

In a statement accompanying the company’s financial results, chairman Kumbirai Katsande said demand for cement was firm following a spike at the beginning of the second quarter.

The group secured external and local facilities amounting to US$38,4 million and utilised US$24,8 million of this amount for working capital, as well as to clear long outstanding foreign obligations.

Katsande said limited access to foreign currency to settle foreign obligations led to the accumulation of cash balances to US$14 million and short-term money-making investments to US$11,9 million.

The group invested US$2,4 million in new plant and machinery upgrades, compared to US$3,7 million in 2017, and these investments included critical projects such as the cement mills aimed at improving plant reliability.

The group believes that demand for cement will continue to firm in 2019, allowing the company to focus on improving its profitability.

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“As such, the business will focus on improving profitability with the anticipation of closing the year strong and in the lead. This will be done by implementing measures to improve plant reliability, creating and developing new business avenues through product development and growing the franchise channel, building stronger and more agile teams and restoring value through interventions such as asset protection,” Katsande said.