Biting economy strikes Turnall’s FY 2019 performance

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  • Depressed product demand registered
  • Group will implement a number of measures in order to consolidate and sustain profit gains
  • Export turnover contributed 5.0% of turnover

Harare -Turnall Holdings Limited registered depressed product demand in the year ended 31 December 2019 (FY 2019) as harsh macroeconomic conditions continue to affect local businesses.

The Group attributed the decline to low disposable incomes as inflation increased during the year, a characteristic of the 2019 operating year.

The decline in demand resulted in an 11% drop in the Group’s turnover in the period under review as compared to the prior comparable period.

Despite slightly improved demand in the second half, the Group was constrained by unavailability of foreign currency for the importation of raw materials, high power outages and shortages due to a decline in local production and imports.

Turnall’s Chairperson, Rita Likukuma said the Group reported profit for the second successive year after year of reporting losses marking the turnaround of the business.

She said the Group will implement a number of measures in order to consolidate and sustain the gains achieved.

As part of the measures, Turnall will focus on increasing the usage of local fibre and reduce reliance on imported fibre, thereby limiting the Group’s exposure to foreign currency shortages.

The Group continues to implement cost control measures to improve the viability of the business as well as improving product offering to enhance competitiveness.

In addition, Mrs. Likukuma said the Group upgraded the fibre cement line to increase capacity and efficiency and plans to upgrade the NuTech fibre cement plant in order to improve the Group’s access to foreign markets.

The Group’s export turnover contributed 5.0% of turnover in the period under review from 0.3% in the previous year, an improvement attributed to the Group’s export strategy that resulted in enhanced presence in the regional markets.

Turnall said it will also continue to prepay for imported raw materials and spares to avoid significant exposure to foreign borrowings and related exchange losses and it will implement technical cooperation initiatives aimed at improving product quality and productivity.

Mrs. Likukuma added that the Group is yet to ascertain the impact of COVID-19 on the Group’s operational and financial performance as this will depend on a number of developments that include duration and spread of the outbreak, impact on customers, suppliers and employees and government interventions.

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