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Blessing Bonga Business Reporter
LAFARGE Cement Zimbabwe’s after-tax profit for the half-year period ended June 30, 2013 declined by 3,8 percent to US$2,6 million due to lower sales volumes and the payment of retrenchment costs. Total revenue generated in the six months amounted to US$32,2 million, which was 6 percent lower than the US$34,3 million generated during the same period last year.
The French-controlled company attributed the decline in revenue to the prevailing liquidity crunch on the market and a decrease in cement sales to the depressed overall domestic demand in the economy.
In a statement accompanying the company’s results, Lafarge chairman Mr Muchadeyi Masunda said he was optimistic that the company’s performance would improve as a result of measures being implemented.
Lafarge said that the statement of the group’s financial position reflects favourable current asset position largely because of an increase in raw material as the company increased production capacity.
“Following the successful implementation of various cost reduction exercises, profitability is expected to improve in the second half of the year,” he said.
The group said US$600 000 went towards settling obligations to employees affected by the retrenchment exercise that was effected during the half year.
Basic earnings per share in the six months were unchanged at US3 cents per share from the prior period.
The company added that their statement of financial position reflects a relatively favourable asset base which has improved to a value of US$62,4 million up from US$59 million in the prior period, mainly because of an increase in the stock of raw materials as they increased their production capacity.
In addition, the company said prospects were modest to high after the country held peaceful harmonised elections, which is expected to improve the operating environment and increase activity in the construction industry.
As such, Lafarge said the net cash used in the company’s operating activities during the half year rose more by than 600 percent from about US$90 000 during the prior period to almost US$700 000 the period under review.
Lafarge’s total current liabilities for the period under review increased by a marginal 2,7 percent from US$16,7 million to US$17,1 million largely dominated by trade and other payables, accruals and provisions and also related party payables.
The cement manufacturing concern said it has in the past five years injected about US$25 million into its plant upgrading exercise, a move that is aimed at boosting the company’s operations while also easing product supply.
Online Reporter