Lafarge defers dividend over economic uncertainties

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  • COVID-19 lockdown caused a significant decline in volumes
  • The Zimbabwean economy is expected to continue to experience challenges in the short to medium term
  • Lafarge says it is poised to mitigate the negative effects of the difficult economic environment

Harare – Lafarge Cement Zimbabwe Limited is preserving working capital by not paying a dividend for the half year ended 30 June 2020 due to the uncertainties prevailing in the economic environment.

The Company which reported a 27% increase in revenue to ZWL$1.1 billion during the half year period, highlighted the upset caused by the ongoing global coronavirus (COVID-19) pandemic on business operations coupled with a generally poor macro-economic environment characterised by hyperinflation and foreign currency shortages.

In statement accompanying the half year report, the Company said, “The business started the year on a satisfactory note with first quarter volumes marginally exceeding the same prior comparable period by 1.4%.

“However, the onset of the COVID-19 lockdown caused a significant drop in the monthly volumes of April 2020 by 71.4% compared to the same month in the prior year”.

Despite volumes recovering in May and June 2020, total volumes for the period closed at 14.1% lower than the same period last year.

“This performance is largely in line with market trends as there is an overall market decline of 13.0% compared to the same period last year,” the Company said.

It said that the Zimbabwean economy is expected to continue to experience challenges in the short to medium term reeling from a combination of inflationary pressures and the ongoing COVID-19 pandemic.

“Although the latter is yet to be fully quantified, it is inevitable that a further slowdown of economic activity may be expected in the absence of a cure or vaccine for COVID-19,” the Company said.

However, the Company expressed positive sentiments on the economy’s readiness to evolve and adapt to operating in the context of the COVID-19 pandemic.

“With a robust and ambitious strategic agenda in place, as well as the capital investment to support it, the business is poised to mitigate the negative effects of the difficult economic environment and grow shareholder value.”

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