- Revenue grew by 83% in 9 months
- 9 months sales volumes decreased by 4%
- Sales volumes for the third quarter increased by 26%
Harare- Willdale Limited, a brick maker in Zimbabwe, has reported robust revenue growth of 83% to ZWL 20 billion during the nine months leading up to June 2023, despite the challenges posed by exchange rate distortions.
Throughout the period under review, exchange rates in Zimbabwe exhibited an average premium of 40% between the official and black-market rates. These distortions in exchange rates presented difficulties for the Company as it was obliged to use formal market rate by the government.
The significant disparity between the official exchange rate used by the government and the actual rate on the black market posed a considerable challenge to Willdale Limited's bottom line. The black market rate, determined by market forces, was much higher than the rate set by the government. This discrepancy impacted the Company's profitability efficacy.
In addition to the exchange rate challenges, Willdale Limited also faced electricity supply issues, which had a negative impact on production. Year-to-date volumes were affected, resulting in a 4% decline. However, the company noted that electricity availability improved during the last quarter, suggesting a potential recovery in production levels.
“The instability in the exchange and inflation rates presented a challenging operating environment characterized by low aggregate demand and high operating costs.
“Electricity supply improved in the quarter boosting efficiencies and production levels,” said the Group.
Despite the challenging operating environment, Willdale Limited experienced a positive development in sales volumes for the third quarter ending on June 30, 2023. Sales volumes increased by 26% compared to the same period in the previous year.
This growth was attributed to the revival of the construction industry following the rain season shutdown period.
Looking ahead, the company anticipates that the tight liquidity conditions will intensify competition in the market. However, it expects the liquidity situation to improve after the general elections.
Willdale Limited plans to continue leveraging its brand reputation, superior product quality, and production capacity to maintain its dominance in the market and sustain its profit margins.
However, the company acknowledges that the availability of a sufficient supply of electricity is a critical factor in achieving these goals. Reliable electricity supply is essential for maintaining production levels and meeting customer demand
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