malvernmugadzikwa
Enacy Mapakame
Listed brick maker – Willdale Limited’s sales volume for the nine months to June 30, 2022 decreased by 9 percent compared to the comparative prior year.
Company secretary, Mavuto Munginga, attributed the decline in sales to lack of stock which was caused by effects of the late April rains.
However, production is currently ahead of target and prior year and this should provide stocks to cover the sales gap in the fourth quarter, he said.
Despite a challenging environment characterized by exchange rate volatility and inflationary pressures as well as global shocks, Munginga said demand remains high, driven by cluster home developments and individual home builders.
“The economic environment remained fluid during the quarter under review, characterized by a depreciating Zimbabwe dollar and rising inflation. Late rains that fell in April impacted on production.
“Real increases in costs of production were incurred as the Russia / Ukraine war affected the cost of fuel and other key cost drivers,” Munginga said in a trading update.
In terms of financial performance, cumulative revenue declined by 1 percent compared to the prior year but was 91 percent above prior year in historical terms.
Although average prices have been affected by exchange rate disparities, product mix remains favourable and this is expected to buttress margins for the full year.
Management is also upbeat of solid revenue performance going forward driven by increasing demand for bricks to meet the high demand for housing.
Munginga added: “Plant capacity utilization which is currently averaging above 80 percent should provide sufficient stocks to meet targeted sales volumes for the ensuing quarter, provided electricity supply remains reasonable.
“We hope the monetary and fiscal policy interventions by government will bring stability to the exchange rate and inflation and a better operating environment.”
Bongani Ndlovu