Ashly DhaniBrick manufacturer Willdale Limited says despite a good start to the production season, a combination of factors, such as electricity load shedding and limitations in working capital, resulted in a 16 percent decline in production compared to the prior year.
In a trading update for the quarter to June 30, 2024, the company said production has since been ramped up to within year-to-date targets.
“Sales volumes declined by 5 percent compared to the prior year largely due to low availability of stock, liquidity shortages and increased competition,” it said.
Despite the decline in volumes, the company said an increase in housing development in most cities and towns subsequently pushed demand up.
The company said the surge in housing development projects in urban areas presents opportunities to increase production and revenue in the remainder of the year.
“Competition, however, remains stiff. Efforts to raise funding to acquire a modern and more efficient brick making plant are in progress,” reads the trading update.
The company noted that land development initiatives are at various stages of statutory approval and are expected to begin to realise cashflows in the coming financial year.
In terms of financial performance, the company’s revenue was 5 percent above budget while product mix remains within target.
“The revenue mix shifted towards the local currency in the quarter under review. Focus remains on generating sufficient cash flows and managing costs,” reads the trading update in part.
In the outlook, the company noted that stability in the macroeconomic environment, underpinned by stable exchange and inflation rates, will increase business confidence and unlock several construction projects.
The company noted that efforts to improve competitiveness through investment in modern plant technology will be intensified in the next quarter.
It noted that cost containment will be critical going forward to sustain margins, faced with increasing competition. — BH24
Online Reporter