Lafarge defies COVID-19 impact with improved revenue and cement sales in 2020

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Key Highlights

  • Revenue up 68.5% to ZW$6.9 billion
  • Attributed to significant volume growth in the Dry Mortars business
  • Gross profit margins grew by 12.4% to 60.6% compared to 53.9% in 2019
  • Records operating profit of ZW$1.9 billion compared to prior year loss of ZW$2.7 billion

HARARE – Lafarge Cement Zimbabwe has reported improved revenue and growth in cement sales volumes in annual financial results detailing its performance during a COVID-19 impacted 2020.

The subsidiary of the Swiss headquartered Holcim and is one of Zimbabwe’s largest suppliers of cement and allied products, said its revenue increased by 68.5% to ZW$6.9 billion against ZW$4.1 billion in 2019.

“This is attributed to significant volume growth in the Dry Mortars business and a market shift towards high strength cement which influenced a significant change in the cement product mix,” the Company’s Chairperson Kumbirai Katsande said in a statement accompanying the financials.

The performance spike defied the impact of COVID-19 as the Company lost a full month of production and sales in April 2020 due to the lockdown.

Mr Katsande said that cement volumes momentum grew in subsequent months, with a particularly strong performance in the third quarter closing at full-year cement volume performance at 6% below the prior year.

In the Dry Mortars business, volumes grew by a remarkable 115% compared to the prior year. The Company attributed to the relaunch of the Supagrow and SupaFix range backed by active market sensitisation of the products that have led to wider product adoption.

Resultantly, gross profit margins grew by 12.4% to 60.6% compared to 53.9% in 2019.

“The recognition and realisation of the RBZ instruments improved the Company’s overall operating costs through reduction of foreign currency exchange losses ZW$336 million (2019: ZW$3.5 billion),” said Mr Katsande.

Meanwhile, the combination of the revenue growth, reduced costs and reduction in foreign exchange losses resulted in the Company turning an operating profit of ZW$1.9 billion compared to the prior year’s loss of ZW$2.7 billion.

On the outlook, the Company anticipates the impact of the COVID-19 pandemic on the business environment to remain for the greater part of the year 2021, given that the year began with yet another COVID-19 induced lockdown.

“The Company will continue to adapt its business strategy so as to thrive in the changing environment.”

The Company commissioned its US$2.8 million dry mortar plant in April this year which is expected to improve the company’s manufacturing capacity per year by over 1 400 percent from 7000 tonnes to 100 000 tonnes of which 40 percent of that is expected to go into the region as exports.

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