Sunday, March 17, 2013

(NEWZIMBABWE) Domestic sales fire Lafarge revenues

Domestic sales fire Lafarge revenues
17/03/2013 00:00:00
by Roman Moyo

ZIMBABWE Stock Exchanged (ZSE) listed Lafarge Cement Zimbabwe’s profits rose to US$4,6 million for the year to December 2012 from US$3,5 million in 2011, the company has revealed. Earnings per share also increased 32 percent to 0,06 cents from 0,04 cents in during the same period.

According to its latest financial results, Lafarge’s revenues rose 41 percent to US$70 million, powered by firmer domestic sales which were up 48 percent.
The group is now projecting a 29 percent increase to US$90 million for the year ended December 31 2013 compared.

Managing Director Jonathan Shoniwa said targets was achievable given that demand for the first two months of the year had improved by 6 percent compared with the same period last year.

Group chairman Muchadeyi Masunda said finance costs went down 21 percent to US$0,54 million as the group contained borrowings.
He said the group spent US$3,5 million on a retrenchment exercise which ate into the company’s top line.

“Net cash generated by operating activities declined from $5,6 million in 2011 to $4,7 million mainly due to an increase in inventory levels and taxes paid,” he said, adding that spare stock was increased to improve the company’s preparedness for emergency breakdowns.

“Cement and clinker stocks were also relatively high as demand tumbled during the month of December owing to heavy rains,” he said.

The housing backlog in Zimbabwe is so huge and mortgage financing is required to support residential projects going forward which would boast Larfage’s operations.

Shoniwa said the market remains predominantly driven by individual home builders while there was a number of construction projects in the pipeline which should boost demand should they materialize

“In order to grow revenue, the Company has increased impetus on other non-cement products such as aggregates and paints. Year to date revenue on these products has improved by 33 percent compared with the same period last year he said.

Masunda added that local demand for cement would remain strong, anchored by growth in mining, construction and infrastructure development.

The cement maker, however, did not declare a dividend but said it was looking into long-term and cheaper finance to mitigate non-dividend payment.

“Following several years of lack of sustainable investment arising from foreign exchange shortages, the business continues to experience urgent working capital and capital expenditure requirements to sustain plant operations and improve efficiencies,” said Masunda.


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