adminHarare Bureau
LOW demand for cement on the local market has affected the first half performance of listed cement manufacturer Lafarge as its volume of cement sales was 12 percent lower compared to the prior period last year.
This had a negative impact on the company’s revenue, which stood at $28,2 million for the half year to June 30, 2014. Those revenues was 12,5 percent lower than the same period in 2013.
Resultantly, Lafarge recorded a gross profit of $9,4 million compared to $14,1 million in the same period in 2013.
Chairman Jonathan Shoniwa said they expect a better performance in the second half of the year.
“Following the successful completion of the kiln shutdown during the period under review, profitability is showing improvement in the second half of the year.
The current assets increase was a result of high maintenance standby spares required to shorten possible plant stoppage durations due to unplanned breakdowns. Clinker stock was also high as demand for cement was low. The increase in mines expansion activities and plant refurbishment works has resulted in higher trade and other payables.”
In terms of borrowings, the cement producer says it has provided security for its overdraft and loan facilities by way of deed of hypothecation for $3 million in favour of its bankers over Lots 1, 3a and 5 of Manresa which had a value of $2,425 million as at June 30, 2014.
It has also an unconditional parental guarantee from Financiere Lafarge South Africa for $3 million Shoniwa said no interim dividend was declared for the period “due to the need to preserve cash for working capital needs.”
So far, the company has invested $5,2 million in capital expenditure, of which $4,4 million has gone towards limestone quarry development.
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derick.khumalo