Lafarge paints gloomy picture for Q2 performance

  • Q2 volumes expected to decline by 30%
  • Net effect will be constrained aggregate demand in the core individual home
  • Q1 volumes 3% above budget

Harare – Lafarge Cement Zimbabwe limited anticipates the coronavirus to impede on its second quarter performance in 2020 as many economic activities continue to be at a standstill.

In a trading update, the company said, “The ripple effects of the lockdown and border closures are still to be fully quantified, but the business expects to continue to feel the effects of the COVID-19 outbreak into the second half of the year.

“It is projected that Q2 2020 volumes will decline by 30%, with the possibility of spill over risks impacting the second half of the year.”

In order to mitigate the financial impact of the situation, the company has launched the action plan “HEALTH, COST & CASH” for immediate execution.

The company added that the net effect will be a slowdown in aggregate demand in the core individual home builder market with foreign funded projects becoming more and more essential in sustaining operations.

In a recent trading update for the first quarter of 2020, the company said volumes were in line with prior year and 3% above budget.

Lafarge also highlighted that although the average selling prices (ASP) achieved were below those of the prior, the product mix was favourable against budget.

Also, the company said it has managed to maintain distribution costs at below both prior year and current year budget.

Lafarge said it is focused on advancing the use of digital customer interface platforms to drive sales and maintain customer engagement with the company’s product offering.

“This puts the business in a relatively strong position during and beyond the COVID-19 pandemic.” added the company.

Meanwhile, cement market leader Portland Pozzolana Cement (PPC) posted a volume slump between 65% – 75% and projected full year volumes to be significantly lower.

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