BY FIDELITY MHLANGA
ZIMBABWE Stock Exchange-listed Turnall Holdings says the distribution of its products has been hampered by movement restrictions as a result of the lockdown imposed by government to stem the spread of coronavirus.
“While the company is allowed to trade under the partial lockdown regulations, the selling and distribution of our products have been curtailed by the restriction of movement and restrictions on purchasing non-essential products,” said Turnall chairperson Rita Likukuma in the company’s first quarter trading update.
The group has also said raw materials and spares imports from Europe, were severely affected by the pandemic.
“The impact on the group’s supply chain is minimal as the group had significant stocks that had been shipped when the lockdowns started. If the lockdowns in Europe are eased soon, the impact on the supply chain would not be significant,” Likukuma said.
The company bemoaned lack of foreign currency on the interbank market to timely import raw materials and spares.
“Foreign currency shortages in the market resulted in the devaluation of the local currency. The country continued to experience hyperinflation with market players changing prices regularly in response to the declining exchange rate between the Zimbabwean dollar and US dollar,” she said.
Electricity and fuel shortages that affected productivity and increased the cost of production have also hit the operations hard, Likukuma added.
Turnall said it experienced increased demand for its products during the quarter with sales volumes for the quarter at 45% above the prior year comparative period. The group’s export sales volumes were 4% of total turnover up from nil in the previous year.
The company noted that after resuming sales on April 26, 2020, production resumed two weeks later, adding that it expects production to be at normal levels by the end of May 2020.
“The group was profitable in the first quarter but reported a loss during the month of April when the company was closed. Nonetheless, management forecasts to report a positive financial performance for the second quarter and half year under the current trading conditions. The group balance sheet was solvent at the time of reporting,” Likukuma said.