ZIMBABWE Stock Exchange-listed building material manufacturer Turnall Holdings says it is to resuscitate its fibre cement plant in Harare to bolster output, as it implements technical cooperation initiatives to improve product quality.
The group this year indicated it was carrying out plant refurbishments at the Harare plant, in addition to several projects valued at US$4 million.
In a statement accompanying financial results for the half year ended June 30, 2022 the group said it was optimistic the business would continue on a profitable path.
“Key focus areas are to recapitalise the plants, improve production efficiencies, improve product offering and reduce production costs. Cost containment and business rightsizing will remain top priorities to enhance profitability. Management is resuscitating the fibre-cement plant in Harare in order to increase production capacity. The group will implement technical cooperation initiatives aimed at improving product quality,” the group said.
During the period, export turnover improved to ZW$10,5 million (about US$305 232) contributing 5% of turnover from 1,2% in the previous year. This was attributed to the group’s export strategy that resulted in enhanced presence in regional markets.
“In the prior year, the group was exporting to Zambia only, but increased its market coverage in 2019 to include Mozambique and South Africa. The group operating costs of ZW$62,5 million (about US$1,8 million ) were 12% above the previous year compared to revenue decline. Finance costs of ZW$$1,88 million (about US$32 325) were 65% below the previous year,” Turnall said.
The group said it will also focus on cost containment and export growth in order to increase sales volumes and obtain foreign currency.
During the period the group reported a monetary gain of ZW$77,7 million compared to ZW$46,8 million (about US$1,3 million ) for the previous year. The group utilised all tax losses from the previous years and will pay current tax of ZW$1,9 million (US$55 232) for the year 2019.
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“The group’s turnover for the year was ZW$231,6 million (about US$6,7 million) which is 11% below the previous year. Despite slightly improved demand in the second half, the group was constrained by unavailability of foreign currency for the importation of raw materials, high power outages and fuel shortages.
“In order to consolidate and sustain the gains achieved the directors will continue with the following measures to ensure that the group continues to operate in the foreseeable future, thereby limiting the company’s exposure to foreign currency shortages. The group continues to implement cost control measures to improve the viability of the business, upgrade the non-asbestos plant in order to improve the group’s access to foreign markets,” the group said.
The gross profit margin for the year in inflation adjusted terms was 51% against the same period last year of 24%.
The improved gross profit margin was attributed to improved production efficiencies, cost containment strategies and a change in the sales mix.