By Staff Reporter
ZIMBABWE-Stock-Exchange-listed cement maker, Lafarge Cement Zimbabwe posted an inflation-adjusted ZW$3,1 billion profit after tax during the year ended December 31, 2020, after revenues surged as management applied tight cost containment measures.
The firm defied Covid-19 induced lockdowns, which affected business during the period in 2019.
Lafarge had posted ZW$3,5 billion loss during the comparable period.
Revenues increased by 68% to ZW$6,9 billion (about US$81 million) after volumes grew in the firm’s dry mortars business, from ZW$4,1 million (about US$48 million) previously.
“The business posted a much-improved financial performance for the year in spite of the Covid-19 induced operational challenges,” said Lafarge chairman, Kumbirai Katsande.
“This is attributed to significant volume growth in the dry mortars business and a market shift towards high strength cement which influenced a significant change in the cement product mix. Despite losing a full month of production and sales in April 2020 due to the Covid-19 induced national lockdown the cement volumes recovered in subsequent months, with particularly strong performance in the third quarter closing at full year cement volume performance at 6% below prior year. Whilst demand was strong, volume growth was limited by capacity constraints owing to the loss of production during the April 2020 lockdown,” Katsande said.
Lafarge’s dry mortars business saw volumes rise by 115% compared to the prior year, driven by the relaunch of its Supagrow and SupaFix range of products.
Gross profit margins grew by 12,4% to 60,6% from 53,9% during the same period in 2019.
“The recognition and realisation of the Reserve Bank of Zimbabwe instruments improved the company’s overall operating costs through reduction of foreign currency exchange losses ZW$336 million (about US$4 million) (2019: ZW$3,5 billion (about US$41 million),” Katsande said.
After battling to stay afloat during the first half of the year, Zimbabwe’s industries reported improved performances during the second half of the year after the central bank introduced the foreign currency auction system in June.