Listed brickmaker Willdale which has enjoyed 4 straight first half of volumes growth prior to the reported period, reports that volumes sold for the 5 months period to February, which is only 1 month shy of its full first half period, were down by a double digit figure.
In the 5 months period volumes came off by 22% below the prior year which was also 18% below budget. The company attributed the decline in volumes due to production outages caused by diesel shortages. Consequently operations were stopped earlier than planned.
Willdale also said the dearth in volumes was a reflection of the mismatch between disposable incomes of the clients and the prevailing prices. Despite the plunge in volumes, the company said it remains profitable due to implementation of some cost containment measures.
The country has been grappled with fuel shortages since 2016 and the challenges have since escalated notably in the last quarter of 2018 forcing business and individuals to scale back on activities and production.
Like Willdale, most companies have enjoyed a tremendous growth over the past 2 years in terms of both volumes and revenue emanating from a surge in aggregate demand. The decline in volumes recorded by Willdale may be an indicator towards a shifting trend due to failing fundamentals.
Giving further details on the operating performance of the company, Willdale said runaway inflation has impacted on its costs and pricing strategies.
Looking ahead the company said it expects to surpass production targets for the year since production for the current year started one month earlier. Fired production for the year is 18% ahead of last year while extrusion is 68% ahead.
The company said it has been able to stockpile critical raw materials such as coal and machine wear parts which are expected to help in keeping production efficiencies high and thereby boost competitiveness.
Willdale has received several enquiries on various bricks projects around the country which it is confident will take off once market confidence confidence around new policies is established. The company anticipates at least 85% plant availability and utilization following planes maintenance.
– Equity Axis News
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