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Enacy Mapakame
Despite recording a 16 percent decline during six months to March 2023, listed brick-making firm, Willdale Limited is confident the business will achieve a strong performance in the next financial year driven by strong demand from ongoing and new building projects and improved availability of electricity.
During the period under review, Willdale’s sales volumes fell on the back of low stock availability resulting from electricity shortages that impacted production. ZESA, a state-owned power utility said last week load shedding would be drastically reduced following the commissioning of two generators at the Hwange thermal plant.
Before the commissioning of the two generators, with a combined capacity of 600 megawatts, the country has been enduring long periods of load shedding which sometimes lasted for more than 12 hours.
Willdale indicated demand for bricks remained strong for the period supported by strong project pipelines across the country. Housing development for both cluster homes and individual units accounted for most of the sales, with significant contributions also noted from improvements in educational facilities.
While Zimbabwe has traditionally struggled to meet the demand for bricks due to capacity constraints, the shortages worsened in recent years largely due to demand from private and public sectors as well as home developments by diaspora funds. Even with the coming of various players into the brick-making sector, the industry’s combined capacity still remains below the levels required to meet the demand.
“We are excited and encouraged by the number of building projects that are in the market driven by both corporates and individuals. The backlog for individual housing remains huge while the government is driving the construction of housing in all provinces,” Chairman Mr Cleopas Makoni said in a performance review update for the period. “These and other infrastructure projects will provide the critical mass for sustainable revenue and profitability in the short to medium term. We remain hopeful that the economy will stabilize soon and provide a better operating environment.”
Already, just like other businesses in Zimbabwe, the company has been affected by the obtaining challenging environment. During the half-year period, the economic environment was characterized by high borrowing rates and depreciation of the local currency against currencies, which impacted business performance.
Revenue increased 29 percent to $3,16 billion compared to $2,45 billion recorded during the same period last year. “Distortions in exchange rates affected the computation of revenue,” said Mr Makoni.
The company incurred an operating loss of $606 million from a profit position of $26 million in the same period last year due to the low revenue base and high seasonal costs. Willdale recorded a profit after tax of $134 million, a decline from the $142 million in the prior year. Total assets increased to $24 billion from $21 billion recorded during the first six months of the prior year.
Online Reporter