BY TATIRA ZWINOIRA
CONSTRUCTION materials manufacturer Turnall Holdings Limited (THL)’s profit-after-tax dropped by 82% to $28,16 million in the half year ended June 30, 2020 owing to COVID-19 lockdown measures.
In the comparative 2019 period, THL posted a profit-after-tax of $153,06 million.In a statement accompanying the company’s financials for the period under review, THL chairman Bothwell Nyajeka said the period was characterised by hyperinflation, cash, fuel and foreign currency shortages as well as power outages which weighed heavily on business.
“The COVID-19 pandemic worsened the situation and business was further affected by the lockdown which was announced at the end of March 2020, resulting in the closure of borders, restriction of movement, reduced trading hours and reduced disposal income for the informal sector,” he said.
“There were several foreign currency policy changes during the period, and the foreign currency interbank system was unable to provide foreign currency requirements for the country.”
Revenue for the period under review was down 30% to nearly $203 million owing to a 3% reduction in sales volumes compared to the comparative 2019 period.
In the 2019 half-year ended June 30, THL made revenue of $290,77 million.
Export volumes were 3% of total volumes because THL did not export any products during the second quarter of the year owing to COVID-19 restrictions.
The profit-after-tax was lower despite a 28% reduction in operating expenses to $56 million from mainly reduced selling and distribution as well as administrative costs compared to the 2019 period.
Total assets were slightly down to $1,26 billion in the period under review owing to reductions in property, plant and equipment, investment property, investments in financial assets, lower deferred taxes, and trade and other receivables.
“The short- to medium-term prospects of the business are dependent on the duration and severity of the COVID-19 pandemic and the measures implemented to contain the pandemic. The combination of the COVID-19 pandemic and hyperinflation is expected to make the trading environment difficult for the business and its customers in the second half of the year,” Nyajeka said.
“Sales volumes for July and August recovered from April and May’s COVID-19 constrained levels and management has implemented measures to ensure business continuity and viability in the uncertain environment and will continuously review these measures.”