Harare – Buildings and associated industries concern, Turnall Holdings Limited has said the Group experienced depressed product demand during the first half of the year ended 30 June 2019 due to low disposable incomes, economic hardships and inflation.
Further crippling businesses operations is the persisting foreign currency shortages negatively impacting on the importation of raw materials and spares critical for production.
“The liquidity constraints witnessed in the market resulted in reduced aggregate demand across the entire construction industry,” the Group’s Chairperson Mrs Rita Likukuma said in a statement accompanying the financials.
The Group’s earnings reflects a positive outturn cognisant of the currency changes that included a change in the functional currency from US dollars to RTGS dollars on 22 February 2019, and the subsequent introduction of the interbank foreign currency market.
The Group’s revenue for the period under review increased by 85% to ZWL$25.0 million compared to ZWL$13.5 million in the prior comparable period.
Profit from operations scaled up 172% to ZWL$6.8 million from ZWL$2.5 million in the previous year while finance costs declined to ZWL$0.3 million from ZWL$0.4 million in the prior year due to the impact of favourable debt restructuring.
The Group achieved a 374% increase in total profit to ZWL$6.6 million compared to ZWL$1.4 million in the prior comparable period.
The Group began exporting to Mozambique towards the end of the second quarter following significant demand for roofing products.
Mrs Likukua said the Group now expects to export to other markets like South Africa in order to generate foreign currency.
“The Group expects exports to increase significantly compared to the previous year,” she said.
Meanwhile, the net current asset position at the end of the period under review improved to $5.7 million from $2.2 million as at 31 December 2018.
“The Group’s interest cover was 23.1 times compared to 6.8 times in the same period last year,” Mrs Likukuma said.
On the outlook, Mrs Likukuma said liquidity constraints in the economy are expected to continue and this will have an adverse impact on the demand for the Group’s products.
“The Group expects marginal growth of volumes in the second half, relative to the first half, as this is the peak period for roofing projects,” Mrs Likukuma said.
“There is evidence that long overdue work on rehabilitation of water and sewage infrastructure is now taking place and the Group has maintained its pipe making capacity in order to satisfy demand from this sector.”
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